23 November 2013, London – U.S. oil firm Chevron said on Friday the development of its North Sea Rosebank project was not currently economically attractive, raising doubts about a resurgence of the North Sea as fears rise over costs.
Chevron said Rosebank, located west of Shetland in the UK North Sea, did not “currently offer an economic value proposition” to justify such a large investment.
Chevron declined to comment on the projected cost of Rosebank, though estimates of up to $8 billion were circulating in news reports over the past year.
Statoil sold its stake in the oil and gas development earlier this year to OMV of Austria.
Chevron’s hesitation is a blow for the prospects west of Shetland, a region crucial to plans to revive production in the British North Sea.
It is also a setback for Cameron International Inc and its newly formed OneSubsea joint venture with Schlumberger , which recently won a $540 million award from Chevron for equipment work at Rosebank.
Cameron said on Friday its total 2014 revenue from Rosebank was estimated at $30 million, and its shares fell 1.5 percent.
The project remains in the initial engineering phase, with a final investment decision planned for 2014, and Chevron said it would continue to work with partners OMV and Denmark’s Dong to improve its viability.
Chevron is now finalising its budget for 2014, which will be an investment-heavy year as it completes its huge liquefied natural gas export project at Gorgon in Australia, as well as three Gulf of Mexico projects due to start up next year that total $14 billion in cost. The budget is due out in December.