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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's Var Energi (Stavanger) and partner Kistos Energy (London) have made a final investment decision to develop the US$690 million Balder Phase V oil and gas project in the North Sea.
It will involve drilling up to six infill wells using all the remaining available template well slots in the existing Balder subsea facilities and tied back to the Jotun floating production, storage, and offloading (FPSO) vessel for processing. Var, which controls a 90% stake in the project, said that the drilling of multilateral wells has resulted in extending the reservoir area, increased recoverable reserves and recovery factor and reduced the number of wells required. The project will develop 33 million barrels of oil equivalent (BOE) of gross proved plus probable (2P) reserves for an investment spend of US$690 million gross and with a breakeven price of around US$30 per barrel. Drilling will commence in the first half of 2025 and be complete in 2026, with the first wells coming onstream by the end of 2025.
The Balder area lies in the central North Sea on the Norwegian Continental Shelf and comprises two main fields: Balder and Ringhorne Øst. Production started in 1999 at Balder, which has been developed with subsea wells tied-back to the Balder production, storage and offloading vessel. The Ringhorne platform commenced production in 2003 and is connected to the Balder FPU that processes and stores oil ready for offload onto shuttle tankers. Extending the life of the Balder area is classed as one of the largest projects on the Norwegian Continental Shelf and will involve billions of euros in investment. With ongoing development projects coming on-stream over the next three quarters, Vår Energi is on track to reach daily production levels of around 400,000 barrels of oil equivalent per day (BOE/d) by the end of 2025. Var is in the process of developing over 20 early phase projects. Balder Phase V is the first of these projects to be sanctioned and the company expects to "sanction multiple further projects during 2025."
Torger Rød, chief operating officer at Var Energi, said: "The Balder area in the North Sea is one of Vår Energi's core hubs and constitutes significant future resource potential. With the refurbished Jotun FPSO on track to commence production from the field within Q2 2025 we have the tool to unlock additional production. The sanctioning of Balder Phase V aligns with our strategy of maximizing value in our core hub areas by utilizing existing capacity and infrastructure. Beyond Balder Phase V, we are also maturing a Balder Phase VI project ensuring further long-term value creation in the area."
The ongoing refurbishment of the Jotun FPSO is key to the project and its future phases, collectively known as Balder X. Delays announced in August pushed back the deployment and drilling activities from ongoing phases until the second quarter of 2025. It also added US$400 million to the price tag. Nick Walker, chief executive officer of Vår Energi, commented: "A key consideration has been to limit the carryover work into the offshore installation and start-up phase as much as possible. Together with our suppliers we have made every effort to complete the final work on the Jotun FPSO at the Rosenberg yard to enable field installation before the winter weather period. However, despite recent good progress, some onshore completion and commissioning work required prior to sail-away remains. Although achieving first oil by the end of the fourth quarter 2024 is no longer possible this has limited impact on 2024 production and our guidance of 280,000-300,000 BOE/d for the year is maintained."
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).
It will involve drilling up to six infill wells using all the remaining available template well slots in the existing Balder subsea facilities and tied back to the Jotun floating production, storage, and offloading (FPSO) vessel for processing. Var, which controls a 90% stake in the project, said that the drilling of multilateral wells has resulted in extending the reservoir area, increased recoverable reserves and recovery factor and reduced the number of wells required. The project will develop 33 million barrels of oil equivalent (BOE) of gross proved plus probable (2P) reserves for an investment spend of US$690 million gross and with a breakeven price of around US$30 per barrel. Drilling will commence in the first half of 2025 and be complete in 2026, with the first wells coming onstream by the end of 2025.
The Balder area lies in the central North Sea on the Norwegian Continental Shelf and comprises two main fields: Balder and Ringhorne Øst. Production started in 1999 at Balder, which has been developed with subsea wells tied-back to the Balder production, storage and offloading vessel. The Ringhorne platform commenced production in 2003 and is connected to the Balder FPU that processes and stores oil ready for offload onto shuttle tankers. Extending the life of the Balder area is classed as one of the largest projects on the Norwegian Continental Shelf and will involve billions of euros in investment. With ongoing development projects coming on-stream over the next three quarters, Vår Energi is on track to reach daily production levels of around 400,000 barrels of oil equivalent per day (BOE/d) by the end of 2025. Var is in the process of developing over 20 early phase projects. Balder Phase V is the first of these projects to be sanctioned and the company expects to "sanction multiple further projects during 2025."
Torger Rød, chief operating officer at Var Energi, said: "The Balder area in the North Sea is one of Vår Energi's core hubs and constitutes significant future resource potential. With the refurbished Jotun FPSO on track to commence production from the field within Q2 2025 we have the tool to unlock additional production. The sanctioning of Balder Phase V aligns with our strategy of maximizing value in our core hub areas by utilizing existing capacity and infrastructure. Beyond Balder Phase V, we are also maturing a Balder Phase VI project ensuring further long-term value creation in the area."
The ongoing refurbishment of the Jotun FPSO is key to the project and its future phases, collectively known as Balder X. Delays announced in August pushed back the deployment and drilling activities from ongoing phases until the second quarter of 2025. It also added US$400 million to the price tag. Nick Walker, chief executive officer of Vår Energi, commented: "A key consideration has been to limit the carryover work into the offshore installation and start-up phase as much as possible. Together with our suppliers we have made every effort to complete the final work on the Jotun FPSO at the Rosenberg yard to enable field installation before the winter weather period. However, despite recent good progress, some onshore completion and commissioning work required prior to sail-away remains. Although achieving first oil by the end of the fourth quarter 2024 is no longer possible this has limited impact on 2024 production and our guidance of 280,000-300,000 BOE/d for the year is maintained."
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).
