Equinor cuts investments for NCS projects in implementation phase

10 October 2018 (Last Updated October 10th, 2018 10:17)

Norway's state-owned oil firm Equinor has cut the estimated investments for operated projects in the development phase on the Norwegian Continental Shelf by around Nkr30bn ($3.62bn). 

Equinor cuts investments for NCS projects in implementation phase
Martin Linge utility module installation by the heavy-lift vessel ‘Thialf’ in July this year. Credit: Jan Arne Wold and Bo B Randulff / Equinor ASA.

Norway’s state-owned oil firm Equinor has cut the estimated investments for operated projects in the development phase on the Norwegian Continental Shelf by around Nkr30bn ($3.62bn).

These are part of its measure to boost drilling-efficiency and reduce costs.

Equinor technology, projects and drilling executive vice-president Margareth Øvrum said: “We have successfully reduced the investment estimates by approximately Nkr30bn since submitting the PDOs to the authorities.

“The improvements have been achieved in close collaboration with our partners and suppliers, and are mainly a result of increased drilling efficiency, simplification and high-quality project implementation. These figures also include the market effect we have achieved by counter-cyclical investments.”

After acquiring operatorship of North Sea Martin Linge development from Total in March this year, the Norwegian firm has performed a detailed review of the project.

“After a successful platform installation, the focus is now to ensure high-quality completion of the project, and safe start-up of the field.”

Based on estimates of the remaining work at Martin Linge, the start-up is scheduled until 2020. Under the updated investment estimate, the amount stands at Nkr47.1bn ($5.7bn). The investment estimate of the field has surged by Nkr3.6bn since the last reporting according to the company’s assessment of the remaining scope of work.

Furthermore, the change of operatorship has led to an accounting change for the project of Nkr1.35bn and this change is applicable to charter rates for storage vessels and historical drilling rig rates.

Øvrum added: “When we acquired the stakes in the Martin Linge field and took over the operatorship, we allowed for any remaining work and increased costs. As announced, we have therefore spent time at the Rosenberg yard to get an overview of this. After successful platform installation, the focus is now to ensure high-quality completion of the project, and safe start-up of the field.”

Martin Linge is an oil and gas field in the North Sea discovered in 1975. Located 42km west of Oseberg at water depths of 115m, the field was transferred to Equinor, formerly Statoil, in March this year.