Nov. 10 (UPI) -- A construction contract for parts of a facility used to tap the Johan Castberg oil field in the Barents Sea will be signed by Christmas, Norway's Statoil said.
Statoil said it signed a letter of intent with Sembcorp Marine Rigs & Floaters in Singapore for contracts related to the construction of the hull and living quarters for the floating production, storage and offloading vessel that will be deployed at Johan Castberg.
Statoil estimates Johan Castberg holds between 450 million and 650 million barrels of oil equivalent. As many as 30 wells are planned for the field in the five years ending in 2024.
The Norwegian company put the value of the contract at around $490 million and said signing and a final investment decision are expected by Christmas at the latest.
"Johan Castberg is the next major field development on the Norwegian continental shelf and important to future infrastructure in the Barents Sea," Torger Rød, Statoil's senior vice president for project development, said in a statement.
The company said the northern port city of Hammerfest, located in Finnmark county, would serve as supply and helicopter base for the development of the Johan Castberg field. Statoil aims to invest around $135 million per year on the field.
Norway posted an unemployment rate of 4.1 percent in August, the last full month for which the government published data. Statoil said Johan Castberg development will have ripple effects across the economy in northern counties, though no Norwegian bidders surfaced for the construction contract.
Norway, one of the largest oil and gas producers in the world, said the output from petroleum-related manufacturing turned lower in the third quarter. Total manufacturing output declined 0.7 percent from the second quarter, bogged down mostly by petroleum-related activity.