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Released September 05, 2018 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's leading oil and gas company Equinor (NYSE:EQNR) (Stavanger, Norway) has submitted plans for the second phase of development of the massive Johan Sverdrup oil field in the North Sea.
The plan for development and operation (PDO) for Johan Sverdrup Phase 2 has been submitted to the Norwegian Ministry of Petroleum and Energy with a reduced total cost of investment and higher-than-expected yields. Equinor said that Phase 2 will cost 41 billion Norwegian kroner (NOK) ($4.9 billion) and will have an improved break-even price of less that $25 per barrel. The resource estimate for the entire Johan Sverdrup field has been raised from 2.1 billion to 3.1 billion barrels of oil equivalent to 2.2 billion to 3.2 billion barrels, with an expected estimate of 2.7 billion barrels.
"The Johan Sverdrup field is the largest field development on the Norwegian shelf since the 1980s," said Eldar Sætre, Equinor's chief executive officer. "At plateau, the field will produce up to 660,000 barrels per day, with a break-even price of less than $20 per barrel and very low CO2 emissions of 0.67 kilograms per barrel. Johan Sverdrup is on track to deliver vast volumes of energy with high profitability and low emissions for many decades to come."
"Today we are announcing an increased resource estimate, and we are reducing the total estimated investment for both Phase 1 and Phase 2 of the development by an additional NOK 6 billion ($71 million) since February of this year. Since the PDO for the first phase in 2015, we have reduced the total estimated investment for Johan Sverdrup full field development by more than NOK 80 billion ($9.5 billion). The project will yield even greater value creation and larger spinoff effects than previously estimated," says Sætre.
He added: "Full field development of Johan Sverdrup is projected to contribute more than NOK 900 billion ($107.6 billion) in income to the Norwegian State over the lifetime of the field. An updated analysis from Agenda Kaupang estimates that the development of Johan Sverdrup Phase 1 and Phase 2 can contribute more than 150,000 man-years in Norway in the period from 2015-2025. In the operations phase, Johan Sverdrup may generate employment of more than 3,400 man-years every year."
Norway's Minister of Petroleum and Energy Terje Søviknes welcomed the planned investment: "The development plans for Johan Sverdrup Phase 2 means that Norway's largest industrial project is passing a new milestone. This is an important day for Norway. The Sverdrup project is by far Norway's largest industrial project, and is estimated to generate more than NOK 900 billion ($107 billion) in future revenues to the state. The development has been of great importance during a tough period for the oil service industry. The development costs for the Sverdrup development as a whole have been significantly reduced, the project remains on schedule and the reserves have increased."
New technology and recovery processes have played a key role in reducing the costs and increasing the yields at Johan Sverdrup. A number of improved recovery technologies are included in the plan:
Earlier this year Industrial Info reported on two new investment projects, worth $7 billion, by Equinor for the development of the Johan Castberg ($6 billion) and the Troll ($1 billion) oil and gas fields. For additional information, see June 26, 2018, article - Norway Approves $6 Billion Plan for Johan Castberg Field and July 18, 2018, article - Equinor Outlines New Plan for Troll Oil & Gas Field.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The plan for development and operation (PDO) for Johan Sverdrup Phase 2 has been submitted to the Norwegian Ministry of Petroleum and Energy with a reduced total cost of investment and higher-than-expected yields. Equinor said that Phase 2 will cost 41 billion Norwegian kroner (NOK) ($4.9 billion) and will have an improved break-even price of less that $25 per barrel. The resource estimate for the entire Johan Sverdrup field has been raised from 2.1 billion to 3.1 billion barrels of oil equivalent to 2.2 billion to 3.2 billion barrels, with an expected estimate of 2.7 billion barrels.
"The Johan Sverdrup field is the largest field development on the Norwegian shelf since the 1980s," said Eldar Sætre, Equinor's chief executive officer. "At plateau, the field will produce up to 660,000 barrels per day, with a break-even price of less than $20 per barrel and very low CO2 emissions of 0.67 kilograms per barrel. Johan Sverdrup is on track to deliver vast volumes of energy with high profitability and low emissions for many decades to come."
"Today we are announcing an increased resource estimate, and we are reducing the total estimated investment for both Phase 1 and Phase 2 of the development by an additional NOK 6 billion ($71 million) since February of this year. Since the PDO for the first phase in 2015, we have reduced the total estimated investment for Johan Sverdrup full field development by more than NOK 80 billion ($9.5 billion). The project will yield even greater value creation and larger spinoff effects than previously estimated," says Sætre.
He added: "Full field development of Johan Sverdrup is projected to contribute more than NOK 900 billion ($107.6 billion) in income to the Norwegian State over the lifetime of the field. An updated analysis from Agenda Kaupang estimates that the development of Johan Sverdrup Phase 1 and Phase 2 can contribute more than 150,000 man-years in Norway in the period from 2015-2025. In the operations phase, Johan Sverdrup may generate employment of more than 3,400 man-years every year."
Norway's Minister of Petroleum and Energy Terje Søviknes welcomed the planned investment: "The development plans for Johan Sverdrup Phase 2 means that Norway's largest industrial project is passing a new milestone. This is an important day for Norway. The Sverdrup project is by far Norway's largest industrial project, and is estimated to generate more than NOK 900 billion ($107 billion) in future revenues to the state. The development has been of great importance during a tough period for the oil service industry. The development costs for the Sverdrup development as a whole have been significantly reduced, the project remains on schedule and the reserves have increased."
New technology and recovery processes have played a key role in reducing the costs and increasing the yields at Johan Sverdrup. A number of improved recovery technologies are included in the plan:
- Water alternating gas injection (WAG)
- PRM (permanent reservoir monitoring) for the full field
- Stepwise implementation of fibre optics in wells
- Step-by-step development of digital twinning
- Technologies for automatic drilling control on the drilling platform
- High-speed telemetry drill pipe
- Improvements in cement quality
- Virtual rate monitoring on subsea wells
Earlier this year Industrial Info reported on two new investment projects, worth $7 billion, by Equinor for the development of the Johan Castberg ($6 billion) and the Troll ($1 billion) oil and gas fields. For additional information, see June 26, 2018, article - Norway Approves $6 Billion Plan for Johan Castberg Field and July 18, 2018, article - Equinor Outlines New Plan for Troll Oil & Gas Field.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
