Delays as a result of the EFTA Surveillance Authority's investigation into the tax regulations for the Snohvit project have led to extra costs of between NOK 500 million and 1 billion. However, Statoil's objective is to implement the project in accordance with the original budget and time frame.
"Despite these delays and the associated increase in costs, the original estimate of NOK 40 billion remains the same. We will now take a look at compensatory measures to claw back lost time. A complete overview of the costs relating to the delay will not be available until nearer 2005," reports Snohvit project director Egil Gjesteland.
The partners in the Statoil operated Snohvit field in the Barents Sea resolved on March 21st to halt work on the project at Melkoya outside Hammerfest in northern Norway until the ESA had clarified the framework terms. The extra costs are a consequence of the almost four-month stoppage. No contracts were entered into and nor were any purchase orders issued during this period. The provisional cost estimates include extra costs of preparing the plant area at Melkoya, increased engineering costs, and future costs for making up the delays.