STAVANGER, Norway, Sept. 13 (UPI) -- Operations at one of the largest fields on the Norwegian continental shelf will create economic ripples, though market vulnerabilities remain, Statoil said.
Norwegian energy company Statoil said the development of the Johan Castberg field will have a profound impact on the nation's economy, though success will be mixed.
"We have created new opportunities for the Johan Castberg field in the far north," Margareth Ovrum, a project vice president for Statoil, said in a statement. "But we are still vulnerable to increasing costs and a continued low oil price."
Statoil, which serves as the operator of the reserve area, said it estimated the proven reserves at Johan Castberg at between 400 million and 600 million barrels of oil. Two years ago, it said its efforts to prove the project was commercially feasible fell flat.
In total, the company said, there were not enough proven resources to make the field viable for supporting infrastructure, including a pipeline to the shore.
In a project update, the company said the technical challenges to developing the field meant costs were still somewhat prohibitive. The options to power operations at Johan Castberg alone are estimated at between half a million dollars and $1.4 billion.
Statoil said it was now distributing a proposed impact assessment for Johan Castberg, which it said may be the largest field of its kind ever slated for development in the country. With an investment plan as high as $7.2 billion, the company said development would represent a substantial amount of the total investments envisioned offshore in the five-year period ending in 2018.
Arne Sigve Nylud, a vice president in charge of exploration and development for Statoil, said the return on investment may be worthwhile for the Norwegian economy.
"The field will provide significant tax income," he said. "The field development and operation will also create new opportunities for the industry throughout Norway."