Statoil to Write Down South Pars in Iran by NK1.6 Bln

Statoil ASA, a Norwegian oil company fined for illegally trying to gain influence in Iran, will write off 1.6 billion kroner ($244 million) at its project in the Persian Gulf country because of cost overruns and delays.

The decision threatens Chief Executive Officer Helge Lund’s goal of increasing oil and gas production by 19 percent next year, the Stavanger, Norway-based company said today. Oil companies around the world are facing rising costs and delays because of rising demand for rigs, pipelines and related equipment.
“We are not as certain of reaching our 2007 production target as we used to be,” Ola Morten Aanestad, a Statoil spokesman, said in a telephone interview. “We have not changed the target now, but we are continuously evaluating it.”

Statoil’s 2007 output target of 1.4 million barrels a day was already at risk because of delays at its Snohvit gas field in the Barents Sea and the Corrib field in Ireland. The setback follows delays at projects run by Royal Dutch Shell Plc in Iran, which typically requires a certain percentage of work be done by locals.

Bloomberg