Several key offshore oil and gas projects being developed in Norway are expected to see cost overruns of over 20 percent initial projections, Norway’s oil and gas ministry said Thursday.
Development costs at the Goliat field operated by Italy’s Eni are expected to be about $200 million more than initially expected, a 49 percent spike over the development plan approved in 2009.
Eni holds a 65 percent operatorship stake in Goliat and Statoil holds a 35 percent stake.
The Brynhild field, a small development operated by Sweden-based Lundin Petroleum, will run over its initial budget by 58 percent, Reuters said.
Lundin holds a 90 percent stake in Brynhild and Canada-based Talisman holds a 10 percent stake.
The Knarr field, operated by UK-based BG Group, will exceed initial cost projections by 36 percent.
BG holds a 45 percent stake in Knarr. Japan’s Idemitsu holds a 25 percent stake, Germany-based Wintershall holds a 20 percent stake and Germany-based RWE Dea holds a 10 percent stake.
Statoil’s Aasgard development, the first subsea gas compression project in the world, will cost 8 percent more than originally planned.
However, Statoil’s Polarled pipeline may cost 10 percent less than expected.
Development costs for oil and gas projects in Norway are already among the most expensive in the world.
The government provides tax breaks for projects in the development stage. However, Norway’s government recently said it will reduce tax breaks for new developments.
The country’s oil ministry is investigating the factors driving cost overruns.