Located about 240 kilometres from the far northern Norwegian town of Hammerfest, the offshore project is scheduled to launch production in 2022, Statoil said in a development plan submitted on Tuesday to the Norwegian authorities.
Its recoverable reserves are estimated at between 450 and 650 million barrels of oil equivalent.
The project's fate has long been uncertain as the necessary investment was initially estimated at more than 100 billion kroner, requiring a barrel at 80 dollars in order to be profitable.
Thanks to a redefinition of the concept and the general drop in costs in the oil services sector, the bill was reduced to 49 billion kroner with a break-even point at less than 35 dollars per barrel.
This investment is good news for the oil sector in Norway, where black gold production has halved since its peak in 2000-2001.
The operation of Johan Castberg is expected to represent about 1,700 jobs, including 500 in northern Norway, Statoil said in a statement.
Statoil owns 50 percent of the project, which includes Italy's Eni (30 percent) and the Norwegian public company Petoro (20 percent).