The Johan Castberg project is expected to commence production in 2022. Credit: Statoil ASA.

Statoil has submitted the plan for development and operation (PDO) on behalf of its partners Eni and Petoro for the Nkr49bn ($5.92bn) Johan Castberg project, around 100km north of the Snøhvit-field in the Barents Sea.

The Johan Castberg project is targeted to deliver its first oil in 2022, with estimated recoverable resources of 450 million to 650 million barrels of oil equivalent.

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The development plan comes after Statoil and its partners reduced the capital expenditures of the project from the previously announced figure of more than Nkr100bn ($12.08bn).

Statoil technology, projects, and drilling executive vice-president Margareth Øvrum said: “The project is central part of the further development of the northern regions, and will create substantial value and spinoffs for Norway for 30 years.

“Today we are delivering a solid PDO for a field with halved capital expenditures and which will be profitable at oil prices of less than $35 per barrel.”

“The project is central part of the further development of the northern regions, and will create substantial value and spinoffs for Norway for 30 years.”

Alongside an operations organisation in Harstad, the Johan Castberg field will have a supply and helicopter base in Hammerfest.

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The company noted that the operating costs of the field will be around Nkr1.15bn ($138.98bn) per year.

Along with the submission of the development plan, Statoil has assigned a Nkr4bn ($483.4m) contract comprising both for the Johan Castberg subsea system, and engineering and procurement management to Aker Solutions.

The subsea development contract includes 30 wells and ten subsea templates, as well as two satellite structures.

Separately, the company signed a letter of intent (LoI) with FMC Kongsberg Subsea for the subsea system for Snorre Expansion Project (SEP) in the Snorre licence in a deal worth around Nkr2bn ($241.7m).