Johan Castberg Oil and Gas Field (Norway)

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Johan Castberg Oil and Gas Field is an in development oil and gas field in Norway.

Project Details

Main Data

Table 1: Field-level project details for Johan Castberg Oil and Gas Field

*Final Investment Decision

Unit name	Status	Operator	Owner	Discovery year	FID* year	Production start year
Johan Castberg	In development	Equinor Energy AS	Equinor Energy AS (50.0%); Vår Energi AS (30.0%); Petoro AS (20.0%)	2011	2017	2024 (expected)

Production and Reserves

Table 2: Reserves of Johan Castberg Oil and Gas Field

million m³ = million cubic meters

million bbl = million barrels of oil

Fuel Description	Reserve Classification	Quantity	Units	Data Year	Source
NGL	original recoverable reserves	0	million bbl	2020
NGL	remaining reserves	0	million bbl	2020
condensate	original recoverable reserves	0	million bbl	2020
condensate	remaining reserves	0	million bbl	2020
gas	original recoverable reserves	0	million m³	2020
gas	remaining reserves	0	million m³	2020
oil	original recoverable reserves	559.16	million bbl	2020
oil	remaining reserves	559.16	million bbl	2020

Location

Table 3: field-level location details for Johan Castberg Oil and Gas Field

Location	Coordinates (WGS 84)
Offshore, Norway	72.46, 20.2 (exact)

The map below shows the exact location of the field:

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Reserves and CO2 Emissions

The proven volumes in Johan Castberg are estimated at between 400 and 650 million barrels of oil. This would produce 172–280 million tonnes of CO2, based on the US EPA estimate of 0.43 metric tonnes of CO2 per barrel of oil.

Strategic Significance

Equinor states that "Johan Castberg is a breakthrough in unexplored areas where we must interact with other interests, such as the fisheries. At the same time, this is a development which will have ripple effects including an impact on technology and expertise building in the supplier industry—particularly in the north." Development of the project would create a gateway to further Barents and Arctic fossil fuel extraction.

Potential ESG Risks

Corruption

While some studies rank Norway as one of the least corrupt countries in the world, Equinor has been accused of corrupt business-dealings on several occasions, including convictions for making bribes (as Statoil) in Iran in 2002, and the company was questioned by authorities in reference to payments in Libya in 2008 and Angola in 2016.

Environment

In November 2017 Greenpeace and Nature and Youth alleged in a lawsuit that drilling permits awarded to Chevron and Statoil (now Equinor) in 2015 violate Paragraph 112 of Norway's Constitution, which states that "natural resources shall be managed on the basis of comprehensive long-term considerations which will safeguard this right for future generations" and that "the authorities of the state shall take measures for the implementation of these principles." Representing the government, Attorney General Fredrik Sejersted claimed that the lawsuit, if successful, "would stop all future oil licenses awarded off Norway and would imperil hundreds of thousands of jobs."

In January 2018 the court found that the project would harm the environment but allowed it on the grounds that most of the oil would be used for export. In February 2018 Greenpeace appealed the decision and asked that it go directly to the Supreme Court without going through the Court of Appeals. In April 2018 the Supreme Court refused to take the case. It is now scheduled to be heard by the Court of Appeals in the fall of 2019.

Local Opposition

Greenpeace and Nature and Youth were the plaintiffs in the November 2017 lawsuits arguing that offshore drilling in Johan Castberg would violate § 112 of the Norwegian Constitution.

In 2015 the environmental coalition Foreningen Grunnloven § 112 was founded to enforce § 112. Its members include the Norwegian Climate Network, Greenpeace Norway, Grandparents' Climate Action, Nature and Youth, Concerned Students Juss, Spire, CAN - Concerned Artists Norway, Changemaker, Norwegian Climate and Health Network, Concerned Scientists Norway and Nature Conservation. WWF Norway is a subsidiary.

Status of Project

In June 2018 the Norwegian Ministry of Petroleum and Energy approved Equinor's plan to develop the field. Initial oil production is scheduled for 2022.

In October 2020, Equinor announced that the Johan Castberg Project's start-up was delayed by one year to the fourth quarter of 2023 due to US$300 million cost increases arising from the Covid-19 pandemic, the weakened Norwegian krone and unforeseen increases in the scope of work. Specific technical problems have affected the project's floating production storage and offloading vessel which has been delayed by a year both due to the closure of the fabrication yard in Singapore as a result of the coronavirus but also problems with welding, which had necessitated repairs.

As of February 2021, the projects status is listed by Norwegian Petroleum as "currently under development, and production is scheduled to start in late 2022" but Equinor states "the field is expected to come on stream in 2023."

Infrastructure

In June 2018 Norway's parliament voted in favour of developing the Johan Castberg oil field in the Barents Sea. Accompanying this decision was the refloating of plans to build an oil terminal at Veidnes, a renowned beauty spot overlooking the Barents Sea. Equinor said that it expected an investment decision on the possible land terminal at Veidnes to be be made in 2019. Following assessment of the feasibility of developing the oil terminal, in December 2019 the Johan Castberg partnership companies announced they would not be proceeding with construction due to the excessive costs involved.

Domestic Political Situation

In 2017 Norway's Sovereign Wealth Fund was advised by Norway's central bank and by the Fund's own ethics adviser to drop its investments in oil, the former making the recommendation for economic reasons, the latter for economic and ethical reasons. In August 2018 Norway's parliament urged the fund to reject these recommendations. With US $1 trillion in assets, it is the largest state-owned fund in the world so any decision to divest would have a dramatic impact on other investment funds.

Project Economics

When the field was discovered in 2011, Equinor estimated that its break-even point for profitability was US $80 per barrel, but Rystad now estimates it at US $35 per barrel. With the Norwegian parliament approving the project in June 2018, this low price-point, if accurate, makes it highly likely that the project will proceed without greater opposition.

International Dynamics

Russia claims that the Svalbard Treaty prevents Norway from unilaterally drilling in the Svalbard portion of the field.

Financing

Lenders and investors for the project include Norges Bank and Norway's Statens Pensjonsfond.

Articles and Resources

Additional data

To access additional data, including an interactive map of oil and gas extraction sites, a downloadable dataset, and summary data, please visit the Global Oil and Gas Extraction Tracker on the Global Energy Monitor website.