Equinor ASA will make a $1.8 billion impairment on its Mariner field after slashing reserve estimates for the U.K. North Sea oil deposit.
The Norwegian company cut total recoverable reserves to about 180 million barrels from a previous estimate of 275 million barrels, it said on Wednesday. The revision is linked to an updated interpretation of seismic data and experience from production of the Maureen reservoir, one of two in the field.
The impairment, which will be reflected in fourth-quarter results to be released in February, comes after Equinor on Tuesday announced a gas trading loss for the period of $1.4 billion to $1.5 billion.
The Mariner field’s reserves have a wide range of uncertainty due to the high subsurface complexity and its early production phase, Equinor said. The revised reservoir model is supported by results from drilling the first well into the Heimdal reservoir in the fourth quarter.
“We are committed to working with our Mariner joint venture partners to identify opportunities to improve recovery and production,” Al Cook, executive vice president for Exploration and Production International, said in the statement. “We plan to continue drilling on the field to prolong cash flow into the future.”
The Mariner field began producing in 2019 and is located on the East Shetland Platform of the U.K. North Sea, about 150 kilometers (93 miles) east of Shetland. Equinor is operator and owns a stake of about 65%.