Det norske to appeal Johan Sverdrup ownership split

Det norske oljeselskap, a Norwegian independent oil company, said on Wednesday it would appeal the recent Norwegian energy ministry’s ownership shares split in the giant Johan Sverdrup field.

The company will appeal to the King in Council, as the highest level of the Norwegian administrative authorities.

To remind, on July 2, the energy ministry proposed the distribution of ownership in the following manner: Statoil (operator) 40.0267%, Lundin Norway 22.6%, Petoro 17.36%, Det norske oljeselskap 11.5733% and Maersk Oil 8.44%.

This meant that the ownership of Det norske would be even lower than the one that had been proposed previously by the majority of the partners in the project, excluding Det norske.

While submitting the development plan for the Johan Sverdrup in February this year, the majority of partners, except for Det norske which disagreed, asked the ministry to determine the final allocation of resources in Johan Sverdrup, based on the following proposal: Statoil 40.0267%, Lundin Norway 22.12%, Petoro 17.84%, Det norske oljeselskap 11.8933% and Maersk Oil 8.12%.

In its quarterly report issued today, Det norske CEO Karl Johnny Hersvik said: “For Det norske, it is a decisive principle that the ownership interests in Johan Sverdrup are to be distributed according to a combination of volume and value. We do not see this principle reflected in The Ministry of Petroleum & Energy (MPE) decision on the unitization split.”

 

Johan Sverdrup dispute

 

The partnership, consisting of Statoil, Lundin Norway, Petoro, Det norske oljeselskap and Maersk Oil, has recommended Statoil as the Operator for all phases of the field development and operation.

However, Det norske disagreed with the proposed ownership split. The Johan Sverdrup field consists of two areas to be unitized into one field development. More precisely, the field covers three production licences: PL 501/501B; PL 265 and PL 502:

 

Partners:

Production licence 501/501B: Lundin Norway (operator, 40%), Statoil (40%), Maersk Oil (20%)

Production licence 265: Statoil (operator, 40%), Petoro (30%), Det norske oljeselskap (20%), Lundin Norway (10%)

Production licence 502: Statoil (operator, 44,44%), Petoro (33,33%), Det norske oljeselskap (22,22%)

 

Det norske alleges that the western part, in which it owns a share is more valuable than the eastern part, with more resources, and easier to recover oil, making the investment less expensive, that should eventually lead to Det norske owning a larger share in the unitized field.

In a presentation supporting its case Det norske said that allocating the interest based solely on volume, would be like trading a house located in a rural area for a house located in the very best parts of western Oslo, swapping one square meter for one square meter regardless of the amount of money spent on improving the house or its future value.

 

Offshore Energy Today Staff

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