Statoil runs over budget with Snoehvit gas field

Costs of Norway's first natural gas field in the Arctic Barents Sea are running 7.5 % over a giant budget set in March, corporate sources at operator Statoil said. Sources at Norway's biggest oil and gas group said costs were running about NOK 3 bn ($ 400.8 mm) over the 40 bn budget approved by parliament in March.
It was unclear whether the extra costs would be covered by a buffer fund for unexpected costs built into the budget, totalling about NOK 4 bn, or would be charged on top of the NOK 40 bn.

Snoehvit is meant to start up in 2006 and produce an annual 5.7 bn cm of LNG for 25 years. Environmentalists say the field will damage the fragile Arctic.
Kjell Erik Eilertsen, an analyst at Alfred Berg, said Statoil was helped by promising news for projects in the Caspian Sea, Iran and Angola. OPEC's decision to stick with output cuts gave Statoil a bigger boost than many peers since its earnings come heavily from oil.