Dec. 21 (UPI) -- An estimated $1 billion in contracts will be awarded now that a plan for enhancing the 200 million-barrel Snorre field is on the table, Norway's Statoil said.
The Norwegian Petroleum Directorate said Thursday that Statoil submitted a plan for an expansion of the Snorre in the North Sea. The regulator said Statoil's program could increase the recovery rate from a field discovered in 1979 and considered one of the larger reservoirs on the Norwegian continental shelf from 46 percent to 51 percent.
"The development plan is the result of dedicated work on the part of the companies and the authorities, an effort that has been ongoing for the past 12-15 years," Arvid Østhus, an assistant development director for the NPD, said in a statement. "This means that this is quite the banner day."
The government estimates the total investment for the Snorre enhancement at $2.3 billion and Statoil said up to $1.07 billion in contracts will be awarded. As much as 23,000 man-years will be needed.
The NPD, the nation's regulator, said Snorre is a complex reservoir that will require a large number of wells to exploit fully. Statoil's development plan includes upgrades to existing infrastructure and as many as 12 wells for production.
Statoil, the field's operator, said the expansion is the largest ever improved oil recovery project on the Norwegian continental shelf. While it was handing in its field development plan to regulators, the company awarded engineering company TechnipFMC a contract of undisclosed value for the fabrication and installation of subsea components.
"Long-term activity and value creation on the Norwegian continental shelf is central in our strategy," Arne Sigve Nylund, Statoil's executive vice president for development and production, said in a statement.
Norway has seen a spike in activity as the year comes to a close. On Monday, German energy company Wintershall said it started production from its Maria oil field in Norwegian waters about a year early and below cost. Startup was planned originally in the fourth quarter of 2018 and the final investment of $1.4 billion was 25 percent below the initial budget.
A government report for the fourth quarter said that, as crude oil prices improve from below $30 per barrel early last year to more than $60 barrel today, it's likely that investments in the petroleum sector will increase.
"The decline in petroleum investment now appears to be over," the report read.