The estimated cost of developing Statoil's Huldra gas and condensate field in the North Sea is going up.
Investment in this project is now expected to reach NOK 5.5 billion, as against an original figure of NOK 4.8 billion.
"Experience with on-going projects shows that costs are generally on the increase," says project manager Morten Ruth. "This is one reason for the revised Huldra estimate."
Another factor contributing to higher spending on this project is the decision to pipe Huldra gas to Norsk Hydro's Heimdal installation for processing, rather than the Statoil gas treatment plant at Kollsnes near Bergen.
The group has also reinforced its project team for this development, while terms obtained in contracts concluded so far - particularly for the drilling rig - are now incorporated in the cost estimate.
A number of jobs have already been awarded for Huldra this year. Aker Verdal in mid-Norway will build the jacket for the unstaffed wellhead platform, with Saipem doing heavy lifts and installation. The Mærsk Gallant jack-up has been chartered to drill production wells.
The last major contract remaining to be placed covers construction of the wellhead module, which is due to be awarded in January.
Statoil's plan for development and operation of Huldra is under consideration by the authorities, but the cost increase means the project needs to be approved by the Storting (parliament). A green light is expected during the Storting's autumn session.