Shtokman project put on ice

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Norwegian oil company Statoil now seems to be finished with its earlier plans to co-develop the huge Shtokman gas field with its main owner, Gazprom of Russia. Now even Gazprom thinks development costs will be too high, and has put the project on ice.

Gazprom announced during a conference in Moscow on Wednesday that everyone involved in the project had “reached the same conclusion, that costs for now are too high to do this.”

Statoil had announced earlier this month that it had handed back its shares in the project, resigned from its board and written off its development costs so far, but would still be open to discussing future cooperation on Shtokman if the market changed.

Now all involved agree that low gas prices have altered prospects for Shtokman’s commercial viability. Statoil is moving forward with a wide range of other investments following a string of recent oil discoveries and even another one announced this week in a far more easily accessible and mature area of the North Sea.

Views and News staff