(Bloomberg) — Norway’s Arctic ambitions just got a $7 billion boost from Statoil ASA.

Norway’s largest oil company was able to halve its expected development costs to keep alive its delayed Johan Castberg development in the Barents Sea. The decision comes as welcome news for an industry that’s struggling with a deep plunge in oil prices and tens of thousands of job cuts.

Statoil’s plans will also benefit other companies that have made discoveries in the Barents Sea, such as Lundin Petroleum AB with its Gohta and Alta finds, said the Swedish explorer’s local manager, Kristin Faeroevik.

“It’s fantastic news,” she said Tuesday in an interview at a conference in Sandefjord, Norway. “I have great confidence that our own discoveries will be developed.”

Statoil announced that the project will proceed after it managed to lower estimated investments to 50 billion kroner to 60 billion kroner ($7 billion) from an earlier estimate of 100 billion kroner. The owners of the oil deposits, which include state-owned Petoro AS and Eni SpA, agreed on using a floating production, storage and offloading facility, with a final investment decision planned for next year and possible production start in 2022.

“This is a project that’s starting to get close to what I would call an attractive project,” Chief Executive Officer Eldar Saetre said at the conference. Statoil will seek to make the project even cheaper, he said.

The decision breaks a string of delays for the project that has suffered from high costs, a tax increase and, most of all, a plunge in oil prices. It goes against a trend of cancellations of energy projects worldwide, not least in the high-cost Arctic, where Statoil and others have abandoned exploration plans from Alaska to Greenland.


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