Statoil has submitted plan for development and operation (PDO) for the NOK49bn ($5.91bn) Johan Castberg project in the Norwegian Barents Sea and has also awarded a $480m contract to Aker Solutions.

Located in PL 532, around 100km north of the Snøhvit-field, the Johan Castberg field is estimated to have 450–650 million barrels of oil equivalent.

Statoil is the operator of the field with a stake of 50% and is partnered by Eni which holds a stake of 30% and Petoro which has a stake of 20%.  

The Johan Castberg project is being touted to be the biggest offshore oil and gas development to be sanctioned in the current year. First oil from this subsea development is slated for 2022.

Statoil technology, projects and drilling executive vice president Margareth Øvrum said: “Johan Castberg has brought challenges. The project was not commercially viable due to high capital expenditures of more than NOK 100 billion and a break-even oil price of more than USD 80 per barrel.

“We have been working hard together with our suppliers and partners, changing the concept and finding new solutions in order to realise the development.”

Øvrum revealed that the Johan Castberg project with halved capital expenditures will be profitable at oil prices of less than $35 per barrel.

Statoil has signed a contract with Aker Solutions for the subsea system, and engineering and procurement management of the Johan Castberg project.

The contract given by the Norwegian oil and gas major is for 30 wells, 10 subsea templates and two satellite structures among others. Aker Solutions will also design the topside of the floating production, storage and offloading (FPSO) facility to be deployed at the field.

Aker Solutions CEO Luis Araujo said: “Our early involvement and strong collaboration with Statoil have helped halve the development costs, enabling this strategically important project to move forward.

"The field is critical in further developing northern Norway as an oil and gas region."

In another development, Statoil has also signed a letter of intent (LoI) with FMC Kongsberg Subsea for the subsea system for Snorre Expansion Project (SEP) in the Norwegian North Sea.

The LoI, which is worth a little under NOK2bn ($240m), will be for six subsea templates and subsea production equipment for 24 wells.

Image: Illustration of the Johan Castberg field in the Norwegian Barents Sea. Photo: courtesy of Statoil ASA.