Aker BP Brings New Field Online Off Norway
Aker BP has brought on stream the second phase of the Aerfugl gas field in the northern Norwegian Sea three years ahead of schedule, it reported on April 22.
Aerfugl is in the northern Norwegian Sea just west of the Skarv field, which was launched in 2013. Aker BP operates both deposits with a 23.8% stake, with its partners comprising Norway's Equinor, Germany's Wintershall Dea and Poland's PGNiG.
The group took a final investment decision on Aerfugl's second phase in November 2019, involving three wells tied to the Skarv floating production storage and offloading unit (FPSO). The stage was scheduled to yield its first gas in 2023, but its first well has now begun flowing, thanks to capacity being increased at the Skarv FPSO. Aerfugl's three first-phase wells will start up in late 2020, while the remaining two second-phase boreholes will start producing in 2021.
Aerfugl has a break-even price of only $15/b, converted from gas, Aker BP said, noting that this made it one of the most profitable projects on the Norwegian shelf. Dated Brent is trading at under $19.5/barrel at time of press. The field's launch also adds five years to the lifespan of the Skarv FPSO. It is expected to flow around 4.2bn m3/yr of gas at peak, according to PGNiG, with recoverable reserves of 300mn barrels of oil equivalent.
"I’m very pleased to mark this milestone. However the good news are offset by the fact that we are facing a global crisis that none of us have experienced before," Aker BP's senior vice president for operations and asset development Kjetel Digre said in a statement. "Investments and explorations activities offshore Norway are put on hold. Tens of thousands of employees in our industry are currently at risk."
Aker BP, jointly owned by Aker with 40% and BP with 30%, recently announced a 20% cut to its capital expenditure plan in 2020. It has also put all non-sanctioned projects on hold.