Green Light for Aker BP's $15 Billion North Sea Projects

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's government has greenlit Aker BP's (Lysakar, Norway) plans to develop and operate two major oil and gas projects in the North Sea with an investment value of more than US$15 billion.

The company will move forward with the Yggdrasil and Fenris areas as well as further development of the Valhall field. Yggdrasil consists of a number of oil field license groups including Hugin, Fulla and Munin. The area is located between Alvheim and Oseberg in the North Sea.

"Yggdrasil is the next major development on the Norwegian shelf, and along with partners Equinor and PGNIG Upstream Norway, we are now opening up a mature area in the North Sea," said senior vice president, Yggdrasil, Lars Høier. "We see considerable potential in the area and recently announced a significant oil discovery on Øst Frigg Beta/Epsilon. This means further improved profitability and increased value creation."

Aker BP recently announced the successful completion of the drilling of the Øst Frigg Beta/Epsilon exploration well in the Yggdrasil area--the longest exploration well ever drilled on the Norwegian Continental Shelf. The updated estimate of the discovery size is 53-90 million barrels of oil equivalent (mmboe), which is twice as large as the original pre-drill estimate. This has increased the resources in the Yggdrasil area by around 10% to more than 700 million barrels.

Aker BP's chief executive officer, Karl Johnny Hersvik, said: "With this decision, the Norwegian Parliament has said yes to thousands of jobs and great value creation in Norway. Yggdrasil and Valhall PWP-Fenris alone constitute more than NOK 165 billion (US$15.3 billion) in investments. We are talking estimated tax revenue of more than NOK 120 billion (US$11 billion) for our nation...and the projects will contribute 130,000 full-time jobs over the fields' lifetimes. Approximately half of this is during the development phase. There will be activity at yards in Egersund, Stavanger, Haugesund, Stord, Verdal and Sandnessjøen, as well as in several hundred suppliers across the country. On top of this, it will generate activity and jobs for suppliers and yards all over the world."

Industrial Info is tracking 50 projects associated with Yggdrasil with a combined investment value in excess of US$3 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report.

Valhall PWP-Fenris in the southern part of the North Sea is ready for construction startup "before summer, right on schedule", Aker BP stated. Project Director Rannveig Storebø said: "Detailed engineering is progressing well. Together with alliance partners and suppliers we have built an integrated team that is ready to extend the lifetime of the giant Valhall." The coordinated development comprises a new centrally located production and wellhead platform (PWP) connected by bridge to the Valhall field center, and an unmanned installation (UI) on Fenris that will be connected to PWP through pipelines on the seabed. New reserves, as a result of the development project, are estimated at 230 mmboe. It will extend the lifetime of Valhall beyond 2028 and continued production of existing reserves estimated at 137 million barrels.

Aker BP explained that it is also establishing Valhall as a gas hub. Production from Fenris will substantially increase gas export from Valhall to Europe and will more than double gas processing capacity.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).