Equinor (NYSE:EQNR) and its Wisting project partners have decided to postpone the investment decision that was scheduled for next month.
An investment estimate for Wisting stands at £8.79 billion, meaning the project has a positive Net Present Value before and after tax after the cost increase.
Equinor says it and its partners in the project will further mature the development concept, the power-from-shore solution, and consider new supplier models for Wisting.
Equinor Energy owns 35 % of the Wisting project and its partners include AkerBP which owns 35 %, Petoro with a 20 % share and INPEX Idemitsu Norge with a stake of 10 %.
Geir Tungesvik, Equinor’s executive vice president, projects, drilling and procurement said: “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.”
Further adding: “Many people have been working hard to realise 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.”
Executive vice president for exploration and production in Norway, Kjetil Hove, commented: “Equinor has been present in Northern Norway and in 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.”
“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 prior to final investment decision. We will aim to do the same with the Wisting project.”
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