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Bellona expects larger cost gaps at the Equinor-operated Martin Linge field. The decision will come next week.
Martin Linge field work was done at the Rosenberg shipyard.
Kjetil Malkenes Hovland, E24
Published:
Equinor recently announced that the company had to drill new wells in the Martin Linge field, because the old wells were not safe enough.
The three new wells will cost around two billion crowns, according to the company. Equinor took over Total field operation in 2018.
On Thursday, Upstream writes that the cost gap at Martin Linge has increased to more than 100 percent compared to Total’s original 2012 plan.
However, the trade magazine refers to anonymous sources and Equinor will not confirm the figures.
With an original estimate of NOK 30.3 billion in the 2012 plan (adjusted for inflation), this means that the cost of development now exceeds NOK 60 billion.
– This is in line with what we have said before. We have said that Martin Linge would reach between 60 and 65 billion crowns, Bellona leader Frederic Hauge tells E24.
The latest update on Martin Linge’s costs was included in the state budget last fall. The project was claimed to have cracked so far at NOK 26 billion. The invoice was then 56 billion.
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Equinor will not comment
Each year, oil companies submit updated estimates of the costs of ongoing projects to the government. Therefore, the decision on the costs of Linge in the state budget for 2021. It will be presented on October 7.
– It will not be correct to comment on this before the state budget is presented next week, Equinor spokesman Fredrik Jebsen Bråten tells E24.
According to Upstream, more postponements are also expected in the project. According to the magazine, production will not begin until the middle of next year at the earliest.
Upstream also notes that Floatel International’s Endurance floating hotel will be located next to the field until January next year. It appeared in a message the company sent earlier this year and indicates that there is still work to be done.
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Bellona believes in write-offs
Bellona’s leader, Frederic Hauge, believes that the Linge Reservoir is more difficult to extract than previously known.
This means Equinor must take a number of steps to extract resources safely, even with pipes that are thinner than intended.
– We believe there is great danger that the value of the field may also need to be noted due to problems with gas extraction at Martin Linge East, says Hauge.
– The resource estimate was increased when the Herja gas discovery was made. We believe that the resources should be noted again at the level that was originally mentioned in the development plan. And we also don’t know if it’s safe to drill here, he says.
The problems also mean that a lot of produced and radioactive water will be released, Hauge says. He says that it is demanding to know what is happening in the project, because it takes a long time before the documents are entered into the records.
– They have problems about which they are not open. There are also record keeping issues here, it takes months before documents are recorded, says the Bellona leader.
Will produce as planned
Equinor is referring to previous statements by the company that it is taking steps such as drilling new wells to ensure the field will produce according to plan.
– The most important thing for us is to ensure a safe start-up of the field, said interim project manager Geir Tungesvik at Equinor in a recent announcement.
– Therefore, we plan to drill up to three new gas wells in addition to the two remaining wells in the development and operation (PDO) plan so that the field can produce as originally planned, he said.
