Var Energi Awards Balder X Oil Contracts in Norway

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Var Energi has awarded a major contract covering engineering, procurement, construction and installment (EPCI) of subsea systems for Norway's $1.65 billion Balder X oil and gas project to oilfield services company Baker Hughes (NYSE:BHGE) (Houston, Texas) and Ocean Installer AS.

Balder X, formerly known as the Balder Future project, on the Norwegian Continental Shelf (NCS), involves the redevelopment of the Balder and Ringhorne fields. Industrial Info is tracking all of the projects associated with the redevelopment of both fields. The goal is to recover 170 million barrels of additional oil and extend the production life of the two fields out to 2045. The news comes just a week after Var Energi agreed to pay $4.5 billion for the Norwegian assets of Exxon Mobil Corporation (NYSE:XOM) (ExxonMobil) (Irving, Texas). The deal makes Var Energi Norway's second-largest independent oil and gas company after Equinor (NYSE:EQNR). Vår Energi is jointly owned by Italy-based energy company Eni (69.6 %) and Norway-based leading private equity investor HitecVision (30.4%). For additional information, see September 24, 2019, article - ExxonMobil Agrees to Sale of North Sea Assets.

The Balder X project will comprise the drilling of 15 new production wells in the Balder field area and 11 new production wells in the Ringhorne field area. Baker Hughes and Ocean Installer will engineer, procure, construct and install 16 new subsea production systems (SPS), umbilicals, risers and flow lines to the Jotun A floating production storage and offloading (FPSO) unit. Baker Hughes and Ocean Installer also will carry out decommissioning work in the field.

Balder X will extend the lifetime of the Jotun A FPSO toward 2045 and the life of the Balder FPSO towards 2030. The Balder field was discovered in 1967 and brought into production in September 1999. It also was one of the first fields on the Norwegian continental shelf to use a permanent FPSO. Var Energi also is planning to execute several exploration drilling campaigns in addition to the extensive production drilling program.

Kevin Murphy, chief executive officer of Ocean Installer, said: "The Balder X project is the largest award in Ocean Installer's history; it doubles our order backlog and allows us to be part of Var Energi's first major development in this region."

Var's recent acquisition of ExxonMobil's upstream assets in Norway includes ownership interests in more than 20 producing fields. The fields are operated mostly by Equinor, including Grane, Snorre, Ormen Lange, Statfjord and Fram, with a combined production of approximately 150,000 barrels of oil equivalents per day (boe/d) in 2019. The company now has total reserves and resources of about 1,900 million boe. Total production is expected to be about 300,000 boe/d in 2019, growing to more than 350,000 boe/d in 2023 as Var invests about $7 billion in development projects such as Johan Castberg, Balder X and Grand in the 2020-23 period.

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