Equinor, along with its partners in the Wisting development, have decided to postpone the final investment decision (FID) scheduled for December 2022. The group is now aiming for an FID by the end of 2026.
Wisting was discovered in 2013 by OMV. Located in license PL 537 in the Hoop area of the Barents Sea, the find is thought to hold almost 500 million BOE. Water depths at the field range from 390 to 418 m.
“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,” said Geir Tungesvik, Equinor’s executive vice president, projects, drilling, and procurement. “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.”
The updated investment estimate for Wisting is $10.2 billion. By comparison, in November 2021, Equinor expected capital costs related to Wisting to be around $8.6 billion. Global inflation and challenges in the energy markets because of the war in Ukraine create 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 realize Wisting, and the decision is demanding,” added Tungesvik. “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.”
Late last year, Equinor awarded contracts for concept studies to advance Wisting. The operator has tapped Aker Solutions, KBR, Sevan SSP, and Aibel related to the floating production, storage, and offloading (FPSO) vessel, and Aker Solutions, TechnipFMC, OneSubsea Processing, IKM Ocean Design, and Kongsberg Maritime for the subsea production and processing equipment, umbilicals, risers, and flowlines.
The plan now is to work with partners and suppliers to improve the economics of Wisting. Equinor and partners will further mature the development concept, the power-from-shore solution, and consider new supplier models for Wisting. If developed, Wisting will become the world’s northernmost oil field.
Equinor operates Wisting and holds a 35% working interest. Partners include Aker BP (35 %), Petoro (20 %), and INPEX Idemitsu Norge (10 %).
