Aker BP to invest over $15bn in Norwegian oil, gas over next five to six years
Aker BP, having recently wrapped up a merger with fellow Norway-focused player Lundin Energy, announced plans on August 29 to invest some 150bn ($15.4bn) kroner in 15 oil and gas projects off the country’s shore over the next five to six years, with development plans due to be submitted for approval to authorities over the next 12 months.
The largest share of the sum will go to the NOAKA area in the North Sea, where Aker BP plans to jointly develop several fields at a cost of 70bn kroner. It will invest a further 40-50bn kroner in adding a new platform to the Valhall field in the southernmost part of the Norwegian North Sea, as well as hook up the Fenris field to the facility. It issued contracts last week to Worley to build two of the platform’s modules.
Meanwhile, Aker BP plans to exploit several satellite fields near the Skarv floating production storage and offloading vessel in the North Sea for 16-20bn kroner. It has several additional subsea projects in the pipeline that will be tied back to the Alvheim, Edvard Grieg and Ivar Aasen fields, all situated in the North Sea.
Aker BP completed its merger with Lundin at the end of June, saying the tie-up would create the “world’s best oil and gas company with low costs, low emissions, profitable growth and attractive dividends.” The combined company produces 400,000 barrels of oil equivalent/day of oil and gas, making it the Norwegian shelf’s second-largest operator after Equinor.
In its announcement, Aker BP praised Norway’s parliament for providing some $11bn of tax relief to the oil and gas industry in 2020, when the coronavirus pandemic and the resulting slump in prices risked sapping investment. Under the measures, firms were allowed to reclaim tax on investments approved by authorities by the end of 2022.
“Now we are standing here a little over two years later and see the direct result of the package of measures that was adopted,” Aker BP CEO Karl Johnny Hersvik commented, noting the support had been “a fantastic success for both the supplier industry and the society in general,”
On the back of new project launches, Aker BP aims to ramp up its production to around 525,000 boe/d in 2028, estimating its investments will raise over 400bn kroner ($41bn) in taxes to the Norwegian treasury over the next ten years, and create 140,000 man-years for Norwegian workers.
“We will lead the transformation of the oil and gas industry. We are investing heavily in a number of digitisation initiatives aimed at creating a productivity resolution in the oil and gas industry,” Hersvik said. “At the same time, we work closely with our alliance partners, all to maximise value creation and reduce emissions.”