DETNF Aker BP Asa (PK)

By Kjetil Malkenes Hovland

OSLO--Statoil ASA (STO) is expected to cut development costs at the Johan Sverdrup field off Norway, Det norske oljeselskap ASA (DETNOR.OS) said Monday, as crude drops below $30 a barrel and oil companies prepare for an extended period of low prices.

Statoil now expects the capital expenditure for the first phase of the giant North Sea oil field to be 108.5 billion Norwegian kroner ($12.23 billion), down nearly 12% compared with the development plan handed to Norwegian authorities last year, and 5% below a September estimate, Det norske oljeselskap said. "The development costs of the field are expected to decrease further," it said.

The Johan Sverdrup field is estimated to hold up to three billion barrels of crude and will start producing in the fourth quarter of 2019. Det norske oljeselskap said measures were also being taken to boost the field's output beyond the estimated 315,000 to 380,000 barrels a day.

At a capital markets day in Oslo, Det norske said it would be able to boost its output to 160,000 barrels a day in the 2020s, nearly triple current levels, depending on improved market conditions.

Det norske oljeselskap produced an average of 60,000 barrels a day in 2015, a significant increase from an average 2,300 barrels a day earlier, on the back of the Oct 2014 acquisition of Marathon Oil's Norwegian assets.

The company estimated its production costs at well below $10 per barrel, making it robust to low oil prices, with Brent crude currently trading at the lowest levels since 2003 at below $30 per barrel.

Det norske has estimated its capital expenditure this year at between $925 million and $975 million, in line with the previous year's spending. It expected its 2016 output at between 55,000 barrels a day and 60,000 barrels a day.

Statoil ASA has a 40.0267% participating interest in Johan Sverdrup, with Lundin Norway, part of Lundin Petroleum AB, holding 22.6%, Petoro 17.36%, Det Norske Oljeselskap ASA 11.5733% and Maersk Oil Norway, part of A.P. Moller Maersk A/S, 8.44%.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

(END) Dow Jones Newswires

January 18, 2016 04:03 ET (09:03 GMT)

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