Development of Statoil's Kvitebjørn gas and condensate field has been postponed because it would be insufficiently profitable.
This conclusion follows an assessment of gas delivery requirements in relation to the financial robustness of new projects off Norway, including Kvitebjørn in the North Sea.
"We will now undertake a completely new review of this development to identify solutions adapted to an oil price around USD 10 per barrel," says project manager Bjarne Bakken.
Statoil had intended to present a plan for development and operation of Kvitebjørn to the Norwegian authorities in June.
That timetable was closely related to the submission of the field to Norway's Gas Supply Committee (FU) as a candidate for delivering gas to continental Europe from 2003.
Plans call for the FU to make its recommendations to the Ministry of Petroleum and Energy on 20 March on which fields should supply gas to meet commitments under existing Norwegian sales contracts with European buyers.
The required volume totals six-eight billion cubic metres of gas annually from 1999. This allocation round must also decide whether new discoveries will be allowed to deliver gas.
Postponing Kvitebjørn means that the field will not be considered for an allocation this time around.
More robust developments and available capacity in existing fields represent the most relevant candidates for additional gas deliveries from 2002, says Elisabeth Berge, who chairs the FU.
Statoil plans to work on improving the profitability of a Kvitebjørn project. That could make this field a strong candidate for Norway's next gas allocation round, which is expected next year.
Although Kvitebjørn has been postponed, sufficient gas will be available from Norwegian fields to support an active role for the country's gas sellers in the market, says Ms Berge.
And the need for gas has been reduced because European customers have failed to exercise a number of purchase options.