“Equinor and partners have worked in close cooperation with the supply industry and developed a technically feasible and environmentally safe Wisting project for the Barents Sea. A development will generate substantial value for society and ripple effects in the north and nationally. In our updated investment estimate for the project, we see a cost increase due to increased global inflation and cost growth in the supply industry nationally and internationally. There is also uncertainty about the framework conditions for the project and execution capacity in the supplier market. Based on an overall assessment, we choose to postpone the investment decision,” says Geir Tungesvik, Equinor’s executive vice president, Projects, Drilling & Procurement.
Updated investment estimate for Wisting is NOK 104 billion. The project has a positive Net Present Value before and after tax after the cost increase.
Global inflation, and challenges in the energy markets because of the war in Ukraine, creates capacity challenges and bottlenecks among international and Norwegian suppliers. The lead time from the yards and from the equipment suppliers has increased.
“Many people have been working hard to realise Wisting, and the decision is demanding. However, in the current supplier market postponing the investment decision to ensure an economically sound development and robustness in the execution phase of the project is the right decision. When the pressure in the supplier market subsides, the Wisting project will be possible to execute in a good way,” says Tungesvik.
“Equinor has been present in Northern Norway and in the Barents Sea for more than 40 years, and the industry has generated substantial value, activity, and jobs. We have a long-term perspective with the Castberg field coming on stream in 2024, we will continue to explore, and we will further develop the Barents Sea”, says Kjetil Hove, executive vice president for Exploration & Production Norway.
“We will now, together with partners and suppliers, mature a profitable Wisting project that will have ripple effects in the North within the ordinary tax regime. We have previously successfully improved projects facing challenging cost developments prior to final investment decision. We will aim to do the same with the Wisting project,” says Hove.
Equinor and partners will now further mature the development concept, the power-from-shore solution, and consider new supplier models for Wisting.
The Wisting partners: Equinor Energy AS (35 %), AkerBP AS (35 %), Petoro AS (20 %) and INPEX Idemitsu Norge AS (10 %).
