Statoil ASA , on behalf of partners Eni SpA (E - Free Report) and Petoro, has presented a plan for development and operation (PDO) for the Johan Castberg project.
The Johan Castberg field is believed to be the biggest offshore oil and gas development project in 2017, with a capital expenditure of about NOK 49 billion. The project, scheduled to come online in 2022, is anticipated to hold recoverable resources of 450-650 million barrels of oil equivalent.
The Johan Castberg field’s operations will be based in Harstad, while the project will have a supply and helicopter base in Hammerfest. The annual costs of operations are anticipated at about NOK 1.15 billion. This is equivalent to about 1700 man-years nationwide, of which about 500 will be from Northern Norway. This takes direct and indirect effects into account.
Statoil is also awarding the contract for the Johan Castberg subsea system, and engineering and procurement management, to Aker Solutions AS, corresponding with the submission of the PDO. These contracts are valued at about NOK 4 billion.
Being a large subsea development, Johan Castberg’s contract consists of 30 wells, 10 subsea templates and two satellite structures.
Additionally, a letter of intent (LoI) is also being signed by Statoil, on behalf of the partners in the Snorre license, with FMC Kongsberg Subsea AS. This is related to the subsea system for Snorre Expansion Project (SEP). The LoI is valued a little below NOK 2 billion and consists of 6 subsea templates and subsea production equipment for a total of 24 wells. These developments will accelerate the progress of Johan Castberg.
Statoil is the operator of Johan Castberg, holding 50%. The other partners are Eni (30%) and Petoro (20%).
Shares of the company have gained 6% compared with the industry’s rally of 9% in the last three months.
Zacks Rank & Other Key Picks
Statoil currently carries a Zacks Rank #1 (Strong Buy). Other prospective players in the energy sector include SunCoke Energy Inc (SXC - Free Report) and Northern Oil and Gas Inc (NOG - Free Report) . Both these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 113.52% in the last four quarters.
Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average earnings surprise of 175.00% in the last four quarters.
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