AlwaysFree: Coronavirus Increases Oil, Gas Project Costs In Norway

The Norwegian government and oil company Equinor on Wednesday said that the coronavirus pandemic had disrupted the country’s offshore oil and gas developments, causing ballooning costs and delayed startup. According to government data, the costs of Norway’s offshore oil and gas projects have increased by 13.2 billion Norwegian crowns ($1.4 billion) compared to a year earlier, on an inflation-adjusted basis.

Despite the swelling costs and negative impacts from the health crisis, Equinor said that the combined project portfolio remained very resilient. The project delays are expected to decrease Norway’s oil production to 2.15 million bpd in 2021, compared to the 2.24 million bpd initially estimated. Gas production is projected to be 117 Bcm, lower than 121 bcm in the previous forecast.

Equinor’s Johan Castberg Arctic oilfield is now expected to cost 53.4 billion crowns, rising from 49 billion crowns in the initial forecast a year ago. Meanwhile, the estimated cost of the company’s Martin Linge oil and gas field rises to 60.8 billion crowns () from 56.1 billion crowns.

Works at Martin Linge were halted in March after a worker was tested positive for the virus. The pandemic also disrupted the building of the field’s floating production, storage and offloading unit (FPSO) at a Singaporean shipyard. Martin Linge and Johan Castberg are now expected to start up in the summer of 2021 and the fourth quarter of 2023, delayed about a year from the original plans.

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