Norway’s oil and gas giant Statoil is moving ahead with plans to develop a giant US$29 billion oil field, entitled Johan Sverdrup, along with the Maersk Group in a bid to produce some of the world’s cheapest oil to increase profits after the recent oil price crash.
According to gCaptain, Statoil said it would start the Johan Sverdrup oil field in the North Sea by 2019 and expects to produce up to 3 billion barrels of oil over 50 years.
The project is expected to break even at under $40 per barrel, giving Statoil a huge margin even after Brent crude plunged to around $60 from over $100 in June, 2014, according to Reuters.
Statoil shares rose 2.8% on relief that Johan Sverdrup successfully passed a key milestone as the company submitted its development plan to the government.
The project encountered a hiccup however, when shareholders failed to agree on ownership stakes, asking the Norwegian government to divide the project.
Until the government’s decision to go ahead with the project, expected in the spring of 2015, Statoil will hold a 40% stake, Det norske 11.8% and Denmark’s Maersk 8.1%.
