Page 18 - EurOil Week 41

EurOil PROJECTS & COMPANIES EurOil

Equinor reports field setbacks

NORWAY NORWAY’S Equinor has announced delays and year as a result of the slump in oil prices.
cost overruns at several key fields, blaming delays The delivery of Castberg’s floating produc-
Equinor’s projects on the coronavirus (COVID-19) pandemic and tion storage and offloading (FPSO) vessel has
have been hit by the the impact of a weaker Norwegian krone. been delayed by a year, Equinor said, moving
coronavirus pandemic In a statement last week, the company said the launch date to the fourth quarter of 2023.
and devaluation of the the Martin Linge, Johan Castberg and Njord The Singaporean yard building the unit was
Norwegian krone. Future projects had seen the biggest changes in closed owing to the pandemic, it said, and work
costs and scheduling. is underway to repair the welds on its hull.
Development plans were filed for Linge, Equinor discovered issues with the welds that
a structurally complex, high-pressure and raised concerns about the FPSO’s long-term
high-temperature (HPHT) field in the north- integrity, Norway’s Petroleum Safety Authority
ern North Sea, back in 2012. It was originally (PSA) reported on September 2.
due to start production four years later. Previous Finally Njord Future, which involves the
delays were due in part to a fatal crane crash in redevelopment of the Njord and Hyme oil and
2017 at the Korean shipyard that was building gas fields in the Norwegian Sea, has seen costs
its platform. rise by NOK8.5bn since the project’s approval
According to Equinor, Linge’s costs have in 2017, including a NOK4.0bn bump since last
inflated by 96%, or by almost NOK30bn year. Equinor blamed the increase on COVID-
($3.3bn), since 2012. This includes a NOK3.6bn 19 restrictions. The project’s launch has also been
bump this year alone, around half of which is pushed back until 2021.
owing to COVID-19 infection control meas- Despite these difficulties, Equinor said its
ures. Martin Linge demobilised all personnel in project portfolio was still strong. It noted its suc-
March in response to the COVID-19 outbreak. cess in bringing the Johan Sverdrup and Utgard
Equinor suffered a further setback at the field projects on stream ahead of schedule and below
this year, when it concluded that it would have to budget. Sverdrup’s second phase and the Snorre
drill several more wells at Linge to replace faulty expansion plan are proceeding on schedule, it
ones completed by France’s Total, which was said.
replaced by Equinor as operator in 2018. “At the same time, I will emphasise that 2020
Linge’s start-up has been pushed back again has been a very challenging year also for our
from 2020 until 2021, Equinor said. industry,” Equinor’s vice-president for technol-
Costs at Castberg, a giant oilfield in the fron- ogy, projects and drilling, Geir Tungesvik, said.
tier Barents Sea, have ballooned by NOK2.8bn “Together with our suppliers we have worked
since development was approved in 2018, hard to mitigate the consequences of COVID-
Equinor said. But excluding the effect of cur- 19. Safety and infection control measures are our
rency fluctuations, they would have fallen by number one priority, and I am impressed by the
NOK1.5bn. Norway’s krone has shed value this work that has been done.” ™

Turkey’s Tupras cuts 2020 forecasts

TURKEY TUPRAS, Turkey’ largest refiner, has revised its volume expectation to 23mn tonnes from 25mn
sales and investment forecasts for 2020 down- tonnes. The investment expectation was cut to
The company has ward due to the adverse impact of the corona- $115mn from $125mn.
revised its sales and virus (COVID-19) pandemic on the company’s The capacity utilisation rate of the refiner is
investment forecasts operating environment. now seen at between 75% to 80% for 2020 versus
downwards to account In April, Tupras said it expected the effects of the previous forecast of 80% to 85%.
for the impact of the the pandemic on the economy would diminish Tupras’s production declined to 4.9mn
coronavirus pandemic. starting from June and economic activity would tonnes in the second quarter of 2020 from 6mn
return to normal in August. tonnes in Q1. In the second quarter of 2019, the
“Due to the ongoing negative impact of company’s output stood at 6.9mn tonnes.
the outbreak on petroleum products demand Its net sales revenues plunged 61% on
globally and significant deterioration in crack an annual basis to Turkish lira (TRY) 9.3bn
margins because of the elevated global product (around €1bn) in Q2 while it posted a net loss
inventories, our 2020 expectations needed to of TRY185mn in the quarter versus a net profit
be revised,” Tupras said in a filing with Borsa of TRY670mn a year earlier. Company Ebitda
Istanbul. also declined, falling to TRY477mn from
Consequently, the company revised its sales TRY1.5bn.™

P18 www. NEWSBASE .com Week 41 15•October•2020