In latest Arctic setback for oil industry, Statoil delays key project.

FT: “Statoil delayed the development of its showcase Arctic oil project for a second time after a string of disappointing drilling results in the Norwegian Barents Sea.”
“The Norwegian oil major said it would make a decision in the summer of 2015 about how to develop the Johan Castberg field, thought to hold 400m-600m barrels of oil.
“It is fair to say that we have had quite extensive exploration activity, and the results are somewhat disappointing. We thought the resources should be greater than they were,” said Arne Sigve Nylund, Statoil’s head of development and production in Norway.
It is the latest Arctic setback for oil companies, which had hoped the high north would prove to be the next big region for them. Royal Dutch Shell and Cairn Energy have had considerable disappointment in Alaska and Greenland respectively.
But the ice-free Barents Sea to the north of Norway is seen as a more attractive prospect both for companies and the government in Oslo, keen to stop ever-declining production where oil output has halved in the past decade.
….Statoil, which has been involved in 99 of the 109 wells drilled in the Barents Sea over the past four decades, had originally envisaged building an onshore hub and pipeline at a cost of NKr80bn-NKr90bn ($13bn-$14.6bn) to develop Johan Castberg.
But it postponed that plan a year ago on worries about the amount of resources, investment needed, and changes in government taxation. It had then promised to unveil a solution by this summer for the field, which lies 240km off the north coast of Norway.
Now Statoil and its partners, Italy’s Eni and Norway’s Petoro, will take another year to decide between two solutions: a cheaper floating production facility and a pipeline to an offshore terminal. The latter would cost NKr10bn more than a floating facility, Mr Nylund said.”