Dec. 7 (UPI) -- Two days after submitting development plans to the government, Norwegian energy giant Statoil said it signed new contracts for Johan Castberg field production.
For an undisclosed sum, the company said it signed a contract with SBM Offshore for the delivery of components for the floating production ship it plans to use to tap the Johan Castberg field in the Barents Sea.
"The contract is an exercise of an option in connection with the conclusion of a front-end engineering design contract with the same company," Statoil explained.
Johan Castberg is located in the Norwegian waters of the Barents Sea and holds at least 450 million barrels of oil equivalent. Statoil said Tuesday it submitted a plan for development and operation to the Norwegian government that outlines an annual cost of operation of $138 million.
"This is a specialized delivery that only a few suppliers internationally have the competence to deliver," Torger Rød, the head of project development for Statoil, said in a statement.
Total capital costs of more than $12 billion make Johan Castberg the largest project sanctioned in the world this year. Operating the field will be profitable for Statoil so long as the price of oil holds in the mid-$30 per barrel range.
The price for Brent crude oil, the global benchmark, was around $61.50 per barrel early Thursday.
Johan Castberg will be "a backbone" for further industry development in northern Norway, the company said. The company signed a $483 million contract with Aker Solutions to develop the subsea components for the field on the same day that it submitted development plans to the government.
The northern port city of Hammerfest, located in Finnmark county, will also serve as supply and helicopter base for the development of the field.
In November, the government said output from petroleum-related manufacturing turned lower in the third quarter and contributed most to the draw down on overall manufacturing activity. Statoil said developing Johan Castberg could create as many as 47,000 full-time jobs.