The consortium planning to develop the giant Shtokman field in the Barents Sea has delayed a final investment decision following a board meeting on Thursday.
The Shtokman Development consortium, which includes Gazprom, Total and Statoil, was expected to make a final decision on the first phase of the $20 billion Arctic field development on Thursday but instead decided to push back FID until 1 July.
“The shareholders are confident that the project can be improved further, both technically and economically,” Shtockman Development said in a statement following the board meeting.
“They agreed that their efforts should continue to be focused on optimising the project and strengthening the dialogue with the Russian authorities.”
The consortia have been seeking tax breaks from the Russian government for the project, in particular the cancellation of the 30% export duty on pipeline gas, as well as discounted rates of mineral extraction tax.
However, Russia’s Deputy Finance Minister Sergei Shatalov said last week the Shtokman Development partners had failed to convince the government to grant the tax breaks.
He was quoted by Reuters as saying the government agreed in principle the project needed incentives, but the group's economic justification had been rejected.
The Stokman Development shareholders were originally expected to reach an investment decision on the development of the field, which is estimated to hold 3.9 trillion cubic metres of gas, in December last year but pushed back the deadline to 1 April.