June 26, 2014 / 9:01 AM / 4 years ago

Statoil says more time needed to decide on key Arctic field

TRONDHEIM, Norway, June 26 (Reuters) - Statoil and its partners need more time to decide how they will develop the $15.5 billion Johan Castberg oil field in the Arctic, Statoil’s chief executive told Reuters on Thursday.

An update on the status of the project had been expected before the summer holidays, which in Norway tend to start at the beginning of July.

“We need more time to mature the concept,” Statoil CEO Helge Lund told Reuters on the margins of a news conference. “It won’t be too long before we say more.”

He did not say when this could happen.

Last year, the oil firm suspended the development of its flagship Arctic project due to cost inflation and a tax hike.

Finding more resources was key to making the project economically viable but in May the firm said the results of the latest, and final, round of drilling were disappointing. ID:nWEB00MI5]

Two options are on the table: to transport the oil from the field via a pipeline to a terminal on land where tankers would load up, or have a floating production storage and offloading (FPSO) facility at the field and load vessels there.

The latter is cheaper and Statoil has previously said it was the more likely option.

Another Statoil executive said discussions about Johan Castberg were currently taking place.

“The discussions are going on now,” Arne Sigve Nylund, Statoil’s head of development and production for Norway, told Reuters.

Statoil is the operator of Johan Castberg and has a stake of 50 percent. Italy’s Eni has a stake of 30 percent and Norwegian state-owned firm Petoro holds the remaining 20 percent. (Reporting by Joachim Dagenborg Writing by Gwladys Fouche; Editing by Mark Potter)

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