Norway’s Equinor and its partners announced that they have raised the project cost estimate for their joint Johan Castberg oilfield in the Arctic Barents Sea by close to 13 billion Norwegian crowns ($1.20 billion).

“Costs are increasing due to a larger than expected scope of work and cost increases in the industry, we take this seriously. However, Johan Castberg is still a good project with a solid economy. With a breakeven of around $35 per barrel, Johan Castberg will provide substantial revenue and ripple effects to the community from the Barents Sea for 30 years,” said Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement.

The updated project cost estimate is now 80 billion Norwegian crowns, an increase of close to 13 billion since last year and up from 57 billion originally projected when the Castberg development was launched in 2017, Equinor said in a press release.

Johan Castberg is a subsea field with 30 wells distributed on 10 templates and two satellites tied back to a floating production, storage, and offloading vessel (FPSO). It is located around 100 km north of the Snøhvit field in the Barents Sea, 150 km from Goliat, and almost 240 km from Melkøya in Hammerfest. The water depth is 360-390 metres.

Proven volumes in Johan Castberg are estimated at between 450 and 650 million barrels of oil. The vessel is designed for a daily production of close to 190,000 barrels.

The project is a joint venture between Equinor Energy as an operator holding 50% stakes, Vår Energi ASA holding 30%, and Petoro AS holding the remaining 20%.