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Shell Halts Subsea Compression Project

Costs cited for Ormen Lange field delay in North Sea


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Shell has indefinitely postponed a project to install subsea compression at Ormen Lange field in the North Sea due to rising costs in Norway’s offshore oil sector.

The company explained that compression was not time-critical to the ultimate recovery from the field, the second largest Norwegian gas reservoir, which eventually lose its natural pressure.

“The oil and gas industry has a cost challenge,” said Odin Estensen, chairman of the Ormen Lange management committee. “This, in combination with the maturity and complexity of the concepts and the production volume uncertainty, makes the project no longer economically feasible.”

Shell is the operator of the field with a 17.8%, Norway’ state-owned Petoro has 36.5%, Statoil 25.4%, Dong Energy 14% and ExxonMobil 6.3%. Petoro reportedly was the only partner objecting to the project delay.

Statoil is proceeding with a pioneer seabed compression development at Åsgard field in the North Sea. That US$2.5 billion project is due on line next year.

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