Norwegian oil company Statoil has completed nearly 60 percent of the Phase 1 of the Johan Sverdrup project in the North Sea while further reducing the gross capital expenditure by NOK 5 billion to NOK 92 billion ($11.8B).
Statoil is the operator of the project with 40.0267 percent interest. Its partners are Lundin Norway with a 22.6 percent working interest, Maersk Oil with 8.44 percent, Petoro with 17.36 percent and Aker BP with 11.5733 percent working interest.
According to Aker BP’s statement on Monday, the Johan Sverdrup development passed the halfway mark over the summer, and is now nearly 60% complete, ahead of plan and below budget.
Aker BP also added that, since the plan for development and operation (PDO) of the Johan Sverdrup field was approved by Norwegian authorities, planned investments for Johan Sverdrup Phase 1 have been reduced by a total of NOK 31 billion.
Johan Sverdrup is one of the five largest oil fields on the Norwegian continental shelf. The field is being developed in several phases. The breakeven price for the full field development is estimated to less than $25 per barrel and the total resources in the Johan Sverdrup field are estimated to between 2.0 and 3.0 billion barrels of oil equivalent.
This investment update for Phase 1 coincides with the assembly operation of the Johan Sverdrup drilling platform which is taking place these days in Klosterfjorden, near Haugesund in Norway. The drilling platform is one of four platforms which makes up the planned field center for Johan Sverdrup.
Phase 1 is expected to start up in late 2019 with production capacity estimated at 440,000 barrels of oil per day.
Phase 2 is expected to start up in 2022, with full field production estimated at 660,000 barrels of oil per day. Peak production on Johan Sverdrup will be equivalent to 25% of all Norwegian petroleum production. Concept decision for Phase 2 was made earlier this year and the selected concept consists of another process platform (P2), modifications to the riser platform and subsea wells.
Alex Schneiter, CEO and President of Lundin Petroleum commented on Monday: “The world class Johan Sverdrup project is progressing really well and continues to get better and better. It is very encouraging to see that we have now passed the halfway mark in Phase 1 of the project and are ahead of schedule. It has been my long held view that costs will continue to come down and today we can announce that the Johan Sverdrup partnership has managed to lower development costs even further.”