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Statoil Delays UK Field Development Worth up to $7B

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Reuters

OSLO, Nov 22 (Reuters) – Norwegian oil and gas firm Statoil has delayed the development of its Bressay heavy oil field in the UK North Sea, hoping to simplify the project and reduce its costs, a spokesman said on Friday.

Bressay, thought to contain between 200 million and 300 million barrels of recoverable oil, was expected to cost up to $7 billion, a relatively high figure because of difficult conditions.

However, well data from the nearby Bentley field, which has similar geology, has indicated potential to simplify the development concept, reduce the number of wells required and make it cheaper, spokesman Knut Rostad said.

"Statoil has, based on the recommendation from the Bressay licence group, decided to reconsider the development concept and delayed the field development decision," Rostad said.

Statoil earlier said it aimed for first oil in the first quarter of 2018 and for Bressay to operate for 30 years.

Rostad said work on the nearby Mariner field, which has around 250 million barrels of recoverable oil, was unaffected and the $7 billion project was moving ahead.

Oil firms have delayed and cancelled projects around the globe this year, hoping to reduce costs and save cash for dividends. Statoil delayed its $15.5 billion Johan Castberg earlier this year due to rising costs.

Bressay, discovered in 1976, laid dormant for decades because it was too expensive to develop but Statoil revisited the project, along with Mariner, after technological advances reduced costs.

The field's development proposal includes drilling more than 70 wells, and the installation of a production, drilling and accommodation platform. It also envisioned a floating storage and offloading unit and pipelines.

Statoil operates the field and holds about 81.6 percent of the licence, while Royal Dutch Shell holds the rest.

Copyright 2014 Thomson Reuters. Click for Restrictions.

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