Go ahead on Barents offshore fields

Despite the oil industry gloom over the low price of oil, two new Arctic offshore oil fields are moving ahead. Norway’s Petroleum Safety Authority has approved the imminent startup of Eni SpA’s Goliat field in the Barents Sea. And Statoil has announced that is going to proceed with development of the Johan Castberg field, also in the Norwegian Barents.

According to a report in the Wall Street Journal, following multiple delays in field startup oil could start flowing from the Goliat field as early as February. The investment of about $6 billion that the partners in the field have put into the project represents a 52 percent cost overrun relative to the original development plan - analysts have assessed that the breakeven oil price for the field is more than $100 per barrel, the Wall Street Journal says.

Reuters has reported that Statoil’s decision to develop Johan Castberg follows a rework of the design for the field. The company had previously deferred a final investment decision but according to Statoil CEO Eldar Saetre now has a development plan that cuts development costs by half. With a design concept involving a floating production, storage and offloading concept, production could start in 2022, Reuters said. Apparently a Norwegian consultancy firm has estimated the breakeven oil price for Castberg to be $56 per barrel.

- ALAN BAILEY