Action on Second Phase of Johan Sverdrup


By MarEx 2017-03-21 20:27:02

The Johan Sverdrup partnership has now decided to proceed with Phase 2 of the offshore Johan Sverdrup development in the North Sea.

Phase 1 of Johan Sverdrup is under development, with first oil scheduled for late 2019. The partners will now proceed with maturing Phase 2 for the investment decision and submission of the plan for development and operation (PDO) in the second half of 2018. Phase 2 is scheduled to come on stream in 2022.

Statoil has implemented several improvement programs for phase 2. Capital expenditures for Phase 2 are now estimated at between NOK 40 – 55 billion ($4.7 – 6.5 billion), halving the estimate since the PDO was submitted for Phase 1 of Johan Sverdrup. The break-even price for the full-field development is now less than $25 per barrel and with an ambition of a world class recovery rate of 70 percent.

Statoil is operator for the development, which spans three licenses. Other partners include Lundin Norway, Petoro, Maersk Oil and Aker BP.

The partnership has also decided on the development concept for Johan Sverdrup. Phase 1 of the development establishes a field center consisting of four platforms on the field. Phase 2 builds on this infrastructure, adding another processing platform to the field center. Overall this will result in a processing capacity of 660,000 barrels of oil per day.

Phase 2 also includes the development of the Avaldsnes (east), Kvitsøy (south) and Geitungen (north) satellite areas to be phased in for processing and export on the field center.

28 new wells are planned to be drilled in connection with the Phase 2 development. The Phase 2 concept also includes the establishment of an area-wide solution for power from shore for the Utsira High by 2022.

The FEED contracts will be awarded in connection with the decision to proceed with the development that has now been made:
Processing platform, Aker Solutions
Jacket, Kværner
Power supply from shore, Siemens.

Phase 1

•    Includes the development of four platforms, three subsea installations for water injection, power from shore, export pipeline for oil (Mongstad) and gas (Kårstø)
•    Under development. Approximately 40 percent of the development is completed
•    More than NOK 60 billion worth of contracts awarded. More than 70 percent of the suppliers with a Norwegian billing address
•    CAPEX estimate: NOK 97 billion
•    Break-even Phase 1: Below $20 per barrel
•    Production start: late 2019

Phase 2

•    Includes development of another processing platform for the field center and the Avaldsnes, Kvitsøy and Geitungen satellite areas, in addition to power from shore to the Utsira High in 2022
•    Investment decision and submission of the plan for development and operation: Second half of 2018
•    Investment estimate: NOK 40 – 55 billion
•    Break-even price: Below $30 per barrel
•    Production start: 2022

Full field 

•    Resource estimate: 2.0 – 3.0 billion barrels of oil equivalent
•    Break-even price: below $25 per barrel.