NORTH SEA GIANT JOHAN SVERDRUP ON STREAM
On 5 October Equinor and the Johan Sverdrup partnership consisting of Lundin Norway, Petoro, Aker BP and Total, started production from the giant field in the North Sea, more than two months ahead of and NOK 40 billion below the original estimates in the Plan for development and operation.
“Johan Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers. At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions. Johan Sverdrup is expected to generate income from production of more than NOK 1400 billion of which more than NOK 900 billion to the Norwegian state and society,” says Eldar Saetre, president and CEO of Equinor.
Johan Sverdrup has expected recoverable reserves of 2.7 billion barrels of oil equivalent and the full field can produce up to 660,000 barrels of oil per day at peak. Powered with electricity from shore, the field has record-low CO2 emissions of well-below 1 kg per barrel.
The break-even price for the full-field development is less than 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. The operator also expects cash flow from operations of around USD 50 per barrel in 2020, based on a real oil price of USD 70 per barrel, partly as a result of the phasing of tax payments in the ramp-up phase.
“Starting production months ahead of schedule helps realize additional value from the field and is fitting for a project that over the development phase has redefined excellence in project execution,” says Anders Opedal, executive vice president for Technology, projects & drilling in Equinor.
The Plan for development and operation (PDO) for Johan Sverdrup phase 1 set an ambition for production start-up in late December 2019. Since the PDO was approved in August 2015, investment costs for the first phase of the development have been reduced by NOK 40 billion to now NOK 83 billion (nominal NOK, fixed exchange rate).
“Close cooperation with our partners and suppliers has contributed to high quality in the execution phase, and has been a key part of the improvement story. And we’ve also made courageous decisions with new technology and digitalization that we’re benefiting from today.”
(Source and image: Equinor)