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Cost of Norway’s oil and gas projects surge by $1.4 billion due to pandemic

Equinor assured that Norway's combined project portfolio is still very resilient despite the pandemic and weakened currency negatively impacting some of the projects.

The costs of Norway’s ongoing offshore oil and gas projects jumped by $1.4 billion from a year ago as COVID-19 restrictions stalled construction.

But oil company Equinor assured that the combined project portfolio is still very resilient despite the pandemic and weakened Norwegian currency negatively impacting some of the projects.

Due to the delays, Norway’s expected oil output for next year is down to 2.15 million barrels per day, slightly less than the 2.24 million predicted a year ago, while gas production is expected at 117 billion cubic meters (bcm), instead of the 121 bcm forecast.

Equinor’s Martin Linge oil and gas field is now expected to cost $6.5 billion, up from an estimated $6.03 billion a year ago, while its Johan Castberg Arctic oilfield is now expected to cost $5.7 billion, up from the previous $5.26 billion.

Both projects have been delayed by about a year, with Martin Linge now expected to come on stream in the summer of 2021 and Johan Castberg in the fourth quarter of 2023.

The cost of the Njord Future project which aims to produce an extra 175 million barrels of oil equivalent from Njord and its tie-back Hyme also rose and the planned startup date has been delayed until next year.

As a result, several smaller projects, which are planning to use the Njord’s production facilities, such as Neptune Energy’s Fenja, will also be delayed.

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