Johan Sverdrup: Estimate Increased, Costs Cut

Johan Sverdrup

By MarEx 2018-08-27 02:00:44

Equinor and the Johan Sverdrup partnership of Lundin Norway, Petoro, Aker BP and Total, are submitting the development plan for the second phase of the Johan Sverdrup offshore oil project to the Norwegian Ministry of Petroleum and Energy on Monday. 

The Johan Sverdrup field, located in the Norwegian North Sea, is the largest field development on the Norwegian shelf since the 1980, and the partners have announced an increased resource estimate and have reduced the total estimated investment for Johan Sverdrup full field development by more than NOK 80 billion ($9.6 billion). 

Phase 1 of the project is around 80 percent complete, and production is expected to commence in November 2019. Cost estimates for this phase have been reduced by NOK two billion ($240 million), so the updated investment estimate for Phase 1 is now NOK 86 billion ($10.3 billion), a reduction of 30 percent, amounting to NOK 37 billion ($4.4 billion) since submission of the Phase 1 development plan.

In the Phase 2 development plan, the companies have reduced the investment estimate to NOK 41 billion ($4.9 billion), and the break-even price for Phase 2 is now less than $25 per barrel. A number of improved recovery technologies are included in the plan:

• Water alternating gas injection
• Permanent reservoir monitoring for the full field
• Stepwise implementation of fiber optics in wells
• Step-by-step development of digital twinning
• Technologies for automatic drilling control on the drilling platform
• High-speed telemetry drill pipe
• Improvements in cement quality
• Virtual rate monitoring on subsea wells.

These developments, along with increased digitalization, have boosted the resource estimate for Johan Sverdrup and led to an estimated recovery rate to over 70 percent for the field. The resource estimate for the entire Johan Sverdrup field is raised from 2.1-3.1 billion barrels of oil equivalent to 2.2-3.2 billion barrels, with an expected estimate of 2.7 billion barrels.

At plateau, the field will produce up to 660,000 barrels per day, with a break-even price of less than $20 per barrel and low CO2 emissions of 0.67 kg per barrel, making it one of the world’s most carbon-efficient fields. The plan for Johan Sverdrup Phase 2 includes measures to facilitate power from shore to the Utsira High by 2022. As a result, emission savings from the Johan Sverdrup field are estimated at 460,000 tons of CO2 per year, which is equivalent to annual emissions from 230,000 private cars.

Production start-up for the Phase 2 development is planned for the fourth quarter of 2022. The field life is expected to exceed 50 years. Full field development of Johan Sverdrup is projected to contribute more than NOK 900 billion in income to the Norwegian State over the lifetime of the field.