With plans for new oil development in the Norwegian Sea approved, Statoil said it's doing more with less because of cost-efficient measures from the industry.
The Norwegian government approved Statoil's development plans for the Trestakk basin in the Norwegian Sea, which were submitted on behalf of a consortium that includes regional subsidiaries of U.S. supermajor Exxon Mobil and Italy's Eni.
The field was discovered in 1986 and the first cost estimate for development came in at around $1.2 billion. When it picked a design concept early last year, the cost was down to $810 million and is now estimated at around $640 million.
"The Norwegian supplier industry has demonstrated its ability to help find high quality and cost-efficient solutions that enable us to realize projects like Trestakk, even in a low oil price environment," Torger Rod, the head of project development at Statoil, said in a statement.
The low price of crude oil has starved companies like Statoil of capital needed to invest in major developments. Some of the companies that service the oil and gas industry, like offshore rig company Seadrill, have mulled bankruptcy options while rivals, like Transocean, are rebuilding their portfolios, but at lower rates.
Transocean this week secured contracts to provide drilling services from Statoil.
Norway is one of the main suppliers of oil and natural gas to the European economy apart from Russia. Statoil estimates the Trestakk prospect holds up to 76 million barrels of recoverable oil equivalent, mainly oil.
"Trestakk is an important contribution in maintaining activities on the Norwegian continental shelf," Rod added.
OPEC thanks Iraq for its role in balancing the market
Iraqi compliance with a multilateral effort to restore balance to the global market for oil has led to its success, OPEC's secretary-general said from Baghdad.
The Organization of Petroleum Exporting Countries is leading a multilateral effort to balance an over-supplied market with managed production declines. Iraq is the second-largest oil producer in OPEC, behind Saudi Arabia.
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