13-10-09 BP has seen costs for further development of the Valhall field, off Norway, balloon by NOK 11.8 bn ($ 2.1 bn) -- a 51 % increase on the budget tabled for the project two years ago.
The Valhall project, which includes a new field centre with power supply from the mainland, future modifications and drilling, is now expected to cost about NOK 35.1 bn, up from NOK 23.2 bn when it was approved in 2007. The new field centre itself has seen a cost increase of 14.4 % to NOK 16.7 bn, compared with the original plan.

The bulk of the increase is mainly due to drilling costs, both because more wells will be drilled and because each well will be more expensive, Norway's Energy Ministry said in an annual update of Norwegian oil and gas projects. The investment plan through 2028 also includes modifications and temporary accommodation for workers at the field.
The increased investment estimate has weakened the current value of the project since the plan for development and operation was approved in 2007, "but the profitability is still good", the ministry said.

The new Valhall production and accommodation platform is due to come on stream next year. The aim is to keep the field in production until 2050.
The new facility is needed not only because the existing facilities are almost 30 years old, but also because the seafloor in the area is subsiding, leaving the platform decks closer to sea level than safety rules permit.

The 23-ton platform will have 180 single cabins and a production capacity of 120,000 barrels of oil per day and 143 mm cf of gas per day.
Operator BP, Shell and Hess each have a 28.09 % interest in Valhall, while Total has a 15.7 % interest.