Equinor has released delayed schedules and cost overruns for several projects in the Norwegian continental shelf (NCS). The COVID-19 pandemic and weakened Norwegian krone have negatively impacted these projects, but the combined project portfolio is still viable. The company said Oct. 7.
The Martin Linge, Johan Castberg, and Njord projects have experienced the largest changes since the PDOs were submitted and will see postponed start-up and cost increases.
Since the PDO in 2012, costs related to Martin Linge have increased by almost NOK 30 billion, a 96% cost increase. Since 2019, the cost estimate has increased by NOK 3.6 billion, about half of which is due to COVID-19 infection control measures. Additional costs are from increased scope of work on the platform and drilling of up to three new wells, as reported by Equinor earlier this autumn.
In March, Martin Linge demobilized all personnel due to COVID-19, and later remobilized with a limited workforce in accordance with new infection control measures. Startup is postponed until summer 2021.
Exclusive of currency effects, cost estimates for Johan Castberg have declined by NOK 1.5 billion since the PDO. Due to an estimated currency loss of about NOK 4.4 billion, the project will still see a total cost increase of NOK 2.8 billion since the PDO was approved in 2018. Since last year, costs have increased by NOK 3.4 billion, with increased costs related to COVID-19 accounting for about NOK 2.5 billion.
Delivery of the FPSO hull is delayed by 1 year as the yard in Singapore has been shut down with a sharply reduced workforce. Work to repair welds on the hull is under way. Scheduled production start is postponed until fourth-quarter 2023.
The investment estimate for the Njord Future project has increased by NOK 8.5 billion, an increase of 53% since the PDO in 2017. The increase is largely due to work on the Njord A platform’s life extension being more extensive than expected, and the increased scope of the Njord Bravo upgrading and tie-in work.
Since last year the investment estimate has increased by almost NOK 4 billion. Roughly half is associated with delays in connection with COVID-19 measures and extended project execution period.
Njord Future will recover expected remaining resources totaling 175 MMboe on Njord and Hyme fields. This corresponds to reserves produced on Njord field since startup in 1997. Upgrading of Njord A platform takes place at Kværner Stord, whereas the Njord Bravo floating storage and offloading vessel is being upgraded at Aibel’s yard in Haugesund.
Planned startup is delayed to 2021.