Equinor Pushes Back Wisting Investment Decision

Norwegian oil major Equinor has decided to postpone the investment decision for the Wisting project scheduled for December 2022.

Equinor said that the maturation of the project continues, aiming for an investment decision by the end of 2026.

According to the company, the updated investment estimate for Wisting is around $10 billion. The project has a positive net present value before and after tax after the cost increase.

“Equinor and partners have worked in close cooperation with the supply industry and developed a technically feasible and environmentally safe Wisting project for the Barents Sea. A development will generate substantial value for society and ripple effects in the north and nationally.”

“In our updated investment estimate for the project, we see a cost increase due to increased global inflation and cost growth in the supply industry nationally and internationally. There is also uncertainty about the framework conditions for the project and execution capacity in the supplier market. Based on an overall assessment, we choose to postpone the investment decision,” says Geir Tungesvik, Equinor’s EVP of Projects, Drilling, and Procurement.

The company added that global inflation and challenges in the energy markets caused by the war in Ukraine created capacity challenges and bottlenecks among international and Norwegian suppliers. The lead time from the yards and the equipment suppliers has also increased.

“Many people have been working hard to realize Wisting, and the decision is demanding. However, in the current supplier market postponing the investment decision to ensure an economically sound development and robustness in the execution phase of the project is the right decision. When the pressure in the supplier market subsides, the Wisting project will be possible to execute in a good way,” Tungesvik added.

“Equinor has been present in Northern Norway and the Barents Sea for more than 40 years, and the industry has generated substantial value, activity, and jobs. We have a long-term perspective with the Castberg field coming on stream in 2024, we will continue to explore, and we will further develop the Barents Sea,” says Kjetil Hove, EVP for Exploration and Production Norway.

“We will now, together with partners and suppliers, mature a profitable Wisting project that will have ripple effects in the North within the ordinary tax regime. We have previously successfully improved projects facing challenging cost developments before the final investment decision. We will aim to do the same with the Wisting project,” Hove concluded.

Equinor and partners will now further mature the development concept, the power-from-shore solution, and consider new supplier models for Wisting.

Equinor is the operator of the Wisting project with a 35 percent stake. Its partner Aker BP also holds 35 percent while Petoro and Inpex hold 20 and 10 percent, respectively.

The Wisting project is in the Hoop area in the Barents Sea, some 190 miles north of Hammerfest. The water depth is between 1,280 – 1,370 feet.

To contact the author, email bojan.lepic@rigzone.com