Production Commences at Johan Sverdrup
Equinor and partners Lundin Norway, Petoro, Aker BP and Total, started production from the giant Johan Sverdrup field in the North Sea on October 5.
The project was live more than two months ahead of schedule and NOK 40 billion below original estimates.
At peak, it will account for around one third of all oil production in Norway. It has expected recoverable reserves of 2.7 billion barrels of oil equivalent and the full field can produce up to 660,000 barrels of oil per day at peak. Powered with electricity from shore, the field has record-low CO2 emissions of well-below one kilogram per barrel, about 25 times less than the world average.
The break-even price for the full-field development is less than $20 per barrel. After reaching plateau for the first phase, anticipated during the summer of 2020, expected operating costs are below $2 per barrel. The operator also expects cash flow from operations of around $50 per barrel in 2020, based on a real oil price of $70 per barrel, partly as a result of the phasing of tax payments in the ramp-up phase.
The development is the largest on the Norwegian Continental Shelf since the 1980s. The first phase of the development has taken above 70 million man-hours, and more than 12,000 people worldwide worked every day during the main construction period 2016-2018.
In the operations phase, expected to last more than 50 years, Johan Sverdrup may also generate employment of more than 3,400 man-years on average every year.
The field will be operated from Equinor’s offices in Stavanger, whereas base and helicopter services will be delivered from Dusavika and Sola. The oil transported from the field will sustain activity at the Mongstad terminal outside of Bergen, and the gas will be exported to Kårstø.
The Johan Sverdrup field is developed in two phases. Phase 1 plateau production is expected to be achieved by summer 2020 and will require two to four new wells to be drilled, with the first of these expected to come on stream around the end of 2019. Phase 1 of the project has been developed as a field center of four platforms – drilling, processing, living quarters and riser platform. Phase II of the development was approved by Norwegian authorities in May 2019 with production start-up expected in Q4 2022.
Key Johan Sverdrup facts
• Field development project execution – engineering and construction was spread all over the world at 22 main sites.
• Field comprises an area of 200 square kilometers, the same size as the City of Stockholm.
• The first phase of the development has taken 70 million man-hours, and more than 12,000 people worldwide have worked every day during the main construction period 2016-2018.
• Total topside weight is ~94,000 tonnes which is comparable with the weight of more than 53,000 Volvo XC60’s.
• Total jacket weight is ~68,000 tonnes which is comparable with the weight of seven Eiffel towers.
• The field will be operated by power from shore, which will reduce the emissions by more than 620,000 tons CO2 per year, compared to traditional gas turbines offshore, equivalent to more than 310,000 private cars.
• Peak production on Johan Sverdrup will be equivalent to 25 percent of all Norwegian petroleum production.