Costs rising at North Sea Martin Linge project
Equinor has achieved cost cuts on various new Norwegian development projects totaling around NOK30 billion ($3.62 billion). However, one exception is the Martin Linge project in the North Sea.
STAVANGER, Norway – Equinor has achieved cost cuts on various new Norwegian development projects totaling around NOK30 billion ($3.62 billion).
“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,” said Margareth Øvrum, evp for Technology, Projects and Drilling.
However, one exception is theMartin Linge project in the North Sea, where Equinor assumed control this March after buying Total’s operated interest. It has since conducted a comprehensive review of the project: based on its estimates of work remaining work ahead of start-up in early 2020, Equinor now forecast total investments of NOK47.1 billion ($5.69 billion).
This is NOK3.6 billion ($435 million) higher than the previous estimate. In addition, the change of operatorship has necessitated an accounting change for the project of NOK1.35 billion ($163 million), applicable to charter rates for storage vessels and historical drilling rig rates.
“When we acquired the stakes in theMartin Linge field and took over the operatorship, we allowed for any remaining work and increased costs,” Øvrum said. “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.”