OSLO, Dec 2 (Reuters) – The board of Norwegian energy company Aker BP (AKRBP.OL) has approved an investment plan worth around 185 billion Norwegian kroner ($19 billion) to develop new oil and gas fields between 2023 and 2028, he announced on Friday. .
The cost estimate for a dozen projects, including the NOAKA development in the North Sea with 600 million barrels of oil equivalent, has risen by more than 20% from the 150 billion crowns forecast in August.
“General cost inflation is a key driver of this increase in capital spending,” a company spokesperson said, declining to elaborate.
Equinor (EQNR.OL) last month postponed plans to develop the Arctic Wisting field, in which Aker BP has a 35% stake, citing the cost impact of global inflation.
The new estimates showed that the costs of the Wisting project amounted to 104 billion crowns, rising from 60 billion to 75 billion crowns, Equinor said.
Equinor and Aker BP have previously flagged the risk of cost inflation on new developments.
Aker BP’s investment plans also include installing a new platform at its Valhall oilfield and developing the nearby Fenris gas discovery, formerly known as King Lear.
It also plans to develop several satellite fields near its Skarv field.
“Net to Aker BP, the projects’ oil and gas resources are estimated at approximately 730 million barrels of oil equivalent,” the company said.
The average breakeven oil price for the developments has been estimated at $35 to $40 a barrel, up $6 from the previous estimate due to government plans to tax the industry more heavily .
The government moved to cut tax incentives that were enacted during the 2020 oil crash caused by the COVID-19 pandemic as companies raked in record profits as the market rebounded.
Benchmark North Sea oil traded at $87 a barrel on Friday.
(1 Norwegian Krone = $0.1026)
($1 = 9.7498 Norwegian kroner)
Reporting by Nerijus Adomaitis Additional reporting by Terje Solsvik Editing by Rashmi Aich and David Goodman
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