Equinor plans $8.8 billion development of world’s northernmost oilfield in Norway’s Barents Sea

Despite climate concerns, Norway's new government will continue to pursue oil development.

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Equinor’s flag in Stavanger, Norway December 5, 2019. (Ints Kalnins / Reuters File Photo)

OSLO — Norway’s Equinor said on Wednesday it plans to invest up to 75 billion Norwegian crowns ($8.8 billion) to develop the Wisting petroleum discovery, set to become the world’s northernmost oilfield.

Located in the Arctic Barents Sea and containing close to 500 million barrels of oil equivalent, the Wisting development is subject to a final investment decision by Equinor and its partners by the end of 2022, the company said in a statement.

Norway’s new government, which took office last month, is determined to continue developing the oil industry, a major source of jobs and export revenue, despite mounting opposition from environmental groups amid fears of climate change.

The Wisting field could come on stream in 2028, partner Lundin Energy has said.

Overall capital investments in the development are expected to be in the range of 60 billion to 75 billion crowns, including the cost of a floating production and storage vessel (FPSO), Equinor said.

The company on Wednesday awarded a front-end engineering and design (FEED) contract worth 350 million crowns to engineering group Aker Solutions for planning the FPSO.

Included in the contract was an option for Equinor to order engineering, procurement, construction, and installation (EPCI) work estimated at a further 8 billion to 12 billion crowns, the company added.

“The contract strategy is based on using Norwegian suppliers by early involvement and will allow for utilizing the local supplier industry in (northern) Norway,” said Mette Ottoey, Equinor’s chief procurement officer.

She added the contract could provide jobs for Norwegian yards and businesses for many years to come.

The ultimate decision on whether to proceed with the project will be made by Norway’s parliament, which could vote on the matter in 2023.

The state-controlled operator has a 35 percent stake in the Wisting discovery, while Sweden’s Lundin Energy recently announced that it would buy Austrian OMV’s 25 percent stake, raising its ownership to 35 percent.

Norway’s Petoro holds a 20 percent stake and Japan’s Idemitsu the remaining 10 percent.