Johan Sverdrup Starts up
Norway’s Equinor has brought on stream the Johan Sverdrup field, a project set to be producing 30% of the country’s oil within a year.
The launch took place on October 5 more than two months ahead of schedule and krone 40bn ($4.4bn) below cost estimates, Equinor said in a statement. The field was first found in the North Sea in 2010 by Sweden’s Lundin Petroleum. Estimated to hold 2.7bn barrels of oil equivalent, it represented the largest find off Norway since the 1970s.
“Johan Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers,” Equinor CEO Eldar Saetre commented. “At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions.”
The first phase of Johan Sverdrup’s development, costing krone 83bn ($4.5bn), will bring output to 440,000 b/day by next summer. The second stage, valued at krone 41bn, will initiate in the fourth quarter of 2022 and raise production to 660,000 b/day.
Equinor operates Johan Sverdrup with a 42.6% stake, having bought an extra 2.6% from Lundin in August. Lundin retains 20%, while Norwegian players Petoro and Aker BP have 17.4% and 11.6% and France’s Total 8.4%.
After taking a final investment decision (FID), the group was able to take advantage of low work rates during the oil market downturn to cut development costs. Johan Sverdrup will have a break-even price of under $20/b with operating costs of less than $2/b, according to Equinor.
Oil will be piped to the Mongstad terminal in Hordaland and gas will go through a new pipeline to Statpipe. From there is will go to Karsto for processing and onward transport.