Austria's OMV raises prospect of further Rosebank delay

Reuters

VIENNA, Aug 12 (Reuters) - A final investment decision on OMV and Chevron's problematic Rosebank oil project in the North Sea may not take place next year as hoped, OMV said on Tuesday.

OMV had said in February it expected to reach a decision in 2015 on the deepwater project, whose development Chevron said last year was not economically attractive. The Austrian company had estimated the costs at $10 billion.

Concerns over high costs have raised questions about the future of North Sea developments, and both Chevron and Royal Dutch Shell have announced job cuts at their North Sea oil operations in Aberdeen, Scotland.

But Chevron said last month it would continue to focus on flagship projects including Rosebank, although the final investment decision (FID) has already been postponed once to next year from this year.

"FID on this project I don't expect this year. I expect by the end of the year to be clear on whether or not we'll take FID or not next year," OMV head of exploration and production Jaap Huijskes told analysts on a webcast call.

"The claim was that costs were out of control. My claim has been and will continue to be that engineering was out of control. What we are doing is Rosebank's being re-engineered."

"Simply hoping that you do another cost estimate and you cut a significant amount of the cost is wishful thinking. You really have to go back to the drawing board," he said.

Scotland will vote this September in a referendum over whether to leave the United Kingdom, a decision that could change the project's outcome should the vote usher in any changes to corporate or tax regulations.

Chevron owns 40 percent in Rosebank and is also the operator. OMV owns 50 percent, with the other 10 percent held by Dong E&P.

"You've got to be a bit careful, of course," Huijskes said. "Telling Chevron how they got it wrong can get a bit sensitive at times." (Reporting by Georgina Prodhan; Editing by Crispian Balmer)

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