Norway’s Statoil energy firm, a 24 percent shareholder in the big Shtokman gas project, is proposing a ten percent cut to project costs to make it more competitive in the global marketplace, Executive Vice President Peter Mellbye said on Monday.
The participants of the project, including Russian gas giant Gazprom with a 51 percent stake and France’s Total which has 25 percent, are looking to boost profitability as the project moves towards final investment decision, Mellbye told Russia Today international news TV channel.
Several key documents concerning the project are likely to be signed at the Saint Petersburg International Economic Forum in late June, he added. The three partners plan to agree on the final investment decision until July 1.
The focus on shale gas production in the U.S. may exert continued downward pressure on gas prices, with the Chinese government also emphasizing its commitment to developing its large shale gas reserves. This meant that there needed to be a clear focus on profitability with the Shtokman project, which was why Statoil was making the proposal, Mellbye also said.
The Shtokman field is located some 600 kilometers northeast of Murmansk in the Russian sector of the Barents Sea in waters up to 340 meters deep. The C1 resource in the license territory amounts to 3.8 trillion cubic meters of gas and 53.4 million tons of condensate.