Commercialising Johan Castberg's 580 million barrels of Arctic oil
Marginal economics have led operator Statoil to review the development concept at the 580 million barrel Johan Castberg Area. An inability to commercialise such a large Arctic development could be detrimental to future activity in the area. Lower than expected reserves have resulted in a post-tax internal rate of return (IRR) of only 10.4%. This is below the average 17% IRR Wood Mackenzie expects Statoil to achieve from their future probable developments.