The North Sea Johan Sverdrup field expects to reach plateau production for the first phase in early May, earlier than anticipated. Due to higher plant capacity, plateau production will increase from around 440,000 barrels of oil per day to around 470,000 barrels per day.
Plateau production was previously expected to be reached during the summer. At the end of March, daily production had already exceeded 430,000 barrels of oil.
“Johan Sverdrup is an important project to the companies, the industry and society at large. The project was sanctioned during the oil price fall in 2015 and resulted in important activity to the supplier industry in a demanding period. With low operating costs Johan Sverdrup provides revenue and cashflow to the companies and Norwegian society at large in a period affected by the coronavirus and a major drop in the oil price. In today’s situation, cooperation between operators, suppliers and authorities is more important than ever to maintain activity and value creation,” says Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.
“Field production has been very good and stable from day one, and the wells have produced even better than expected,” says Rune Nedregaard, vice president for Johan Sverdrup operations. “We are currently completing the tenth well. This work is progressing smoothly, helping reach higher production earlier than expected. We also expect to increase plant capacity, allowing plateau production to increase from the previously expected 440,000 barrels to around 470,000 barrels of oil per day.”
The Johan Sverdrup field came on stream on 5 October last year, more than two months ahead of the original schedule and NOK 40 billion below the original estimate for development and operation (PDO August 2015).
The break-even price for the full-field development is below USD 20 per barrel, and expected operating costs are below USD 2 per barrel.
“Johan Sverdrup has very low production costs, contributing with a strong cashflow also in periods with low prices, as we experience” says Nedregaard.
At plateau in phase 2 the field will produce 690,000 barrels of oil per day. Expected recoverable reserves in the field are 2.7 billion barrels of oil equivalent. Our ambition for the field is to achieve a recovery factor of more than 70 per cent.
“We are working systematically with our partners to increase value creation from the field and ensure an optimal recovery factor,” says Nedregaard.
PARTNERS: Equinor: 42.6% (operator), Lundin Norway: 20%, Petoro: 17.36%, Aker BP: 11.5733% and Total: 8.44%.
About Johan Sverdrup
- Johan Sverdrup is the third largest oil field on the Norwegian continental shelf, with expected resources of 2.7 billion barrels of oil equivalent.
- At plateau the field is expected to produce 690,000 barrels of oil per day, which will make up about one-third of oil production on the NCS.
- Break-even price for the full-field development is below USD 20 per barrel. After reaching plateau for the first phase, anticipated during the summer of 2020, expected operating costs are below USD 2 per barrel.
- Estimates from 2018 showed that the combined income from production from Johan Sverdrup amounts to 1430 billion NOK (2018) over the life of the field. Income to the Norwegian state is expected to amount to more than 900 billion NOK (2018), from taxes and from the Norwegian state’s ownership of Petoro.
- Each barrel of oil generates less than 0,7 kg of CO2-emissions, compared to the global average of 18 kg of CO2 per barrel. This result is mainly due to electrification of the field.
- Electrification is an important tool for reaching Norwegian and international climate goals. Equinor aims to reduce greenhouse gas emissions in Norway by 40 percent by 2030 and towards near zero emissions by 2050.
- After 2022, Johan Sverdrup will also provide power from shore to other fields on the Utsira High, including Edvard Grieg, Ivar Aasen and Gina Krog.
- The Johan Sverdrup field is developed in two phases. Phase 1 was approved by Norwegian authorities in 2015 and came on stream in October 2019. Phase 2 of the development was approved in 2019 and is expected to start production in Q4 2022.
- Included the development of four platforms (accommodation and utility platform, processing platform, drilling platform, riser platform), three subsea installations for water injection, power from shore, export pipeline for oil (Mongstad) and gas (Kårstø).
- Contracts awarded in phase 1 amounted to more than NOK 60 billion. Over 70% of the suppliers had a Norwegian billing address.
- Production capacity: 470,000 barrels of oil per day.
- Capital expenditures: NOK 83 billion (nominal terms based on fixed currency).
- Production start-up: October 2019.
- Includes development of another processing platform (P2), modifications of the riser platform and the field centre, five subsea templates, in addition to the power-from-shore supply to the Utsira Highby 2022.
- Contracts awarded so far in phase 2 amount to more than NOK 20 billion. 85% of the contracts have been awarded to suppliers in Norway.
- Production capacity: 220,000 barrels of oil per day.
- Capital expenditures: estimated at NOK 41 billion (nominal terms based on fixed currency).
- Production start: Q4 2022 (expected).