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01/07/2020 | Press release | Distributed by Public on 01/07/2020 02:21

The Norwegian prime minister opening the Johan Sverdrup field today

The Johan Sverdrup field in the North Sea. (Photo: Ole Jørgen Bratland)

Norway's prime minister Erna Solberg will perform the official opening of the Johan Sverdrup field centre today, and the Minister of Petroleum and Energy, Sylvi Listhaug, will also attend the opening.

Since Equinor and the Johan Sverdrup partners Lundin Norway, Petoro, Aker BP and Total started the field on 5 October last year, production has increased to a level well above 300,000 barrels per day.

Johan Sverdrup is expected to yield a total production revenue exceeding NOK 1 400 billion and more than NOK 900 billion in revenue to the Norwegian state.

Expected recoverable Johan Sverdrup reserves are 2.7 billion barrels of oil equivalent. Two thirds of the oil from Johan Sverdrup are expected to be produced before 2030.

The field is setting a new standard for CO2 efficiency. Land-based power supply leads to record-low CO2 emissions of well below 1kg per barrel, compared to a global average of around 18kg.

'Johan Sverdrup offers both high value creation and record-low emissions, making Johan Sverdrup a future-oriented oil field and part of the solution for reduced emissions. Electrification is an important tool for reaching Norwegian and international climate goals, aiming to reduce our greenhouse gas emissions in Norway by 40% by 2030, and close to zero emissions in 2050,' says Eldar Sætre, CEO of Equinor.

CEO Eldar Sætre (left) and Arne Sigve Nylund, executive vice president for Development and Production Norway. (Photo: Ole Jørgen Bratland)

Johan Sverdrup is based on a long history of valuable experience and expertise. The field is also a pioneer in using technology and digitalization.

'Digitalization offers new opportunities that few people deemed possible only a few years ago. It is necessary to secure the transformation we need to succeed in our future industrial activities and value creation on the Norwegian continental shelf,' says Arne Sigve Nylund, executive vice president for Development and Production Norway.

Digital solutions are integrated on the field - as an example we are monitoring the reservoir and optimizing production thanks to huge amounts of data transmitted from the wells. A 'digital twin' provides a virtual real-time version of what is happening on Johan Sverdrup. This analytical tool helps improve safety, increase revenue and reduce emissions.

The field is expected to produce up to 660,000 barrels of oil per day in full production. Plateau production for phase 1 is up to 440,000 barrels of oil per day and is expected to be reached in the summer of 2020.

'We are working systematically on creating higher value from the field and achieving an optimal recovery rate. The field ambition is to reach a recovery rate above 70%,' says Nylund.

In the operating phase Johan Sverdrup may also create jobs corresponding to an average of more than 3 400 man-years per year.

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FACTS ABOUT JOHAN SVERDRUP

  • Johan Sverdrup is the third largest oil field on the Norwegian continental shelf, with expected resources of 2.7 billion barrels of oil equivalent.
  • At plateau the field will produce up to 660,000 barrels of oil per day, which will make up about one-third of oil production on the NCS.
  • Break-even price for the full-field development is below USD 20 per barrel. After reaching plateau for the first phase, anticipated during the summer of 2020, expected operating costs are below USD 2 per barrel.
  • Estimates from 2018 showed that the combined income from production from Johan Sverdrup amounts to 1430 billion NOK (2018) over the life of the field. Income to the Norwegian state is expected to amount to more than 900 billion NOK (2018), from taxes and from the Norwegian state's ownership of Petoro.
  • The Johan Sverdrup field is powered with electricity from shore. CO2 emissions from production of oil and gas from Johan Sverdrup are estimated at 0.67 kg CO2 per barrel. CO2 emissions reductions from the field due to power from shore are estimated at more than 620,000 tonnes of CO2 per year, totaling more than 25 million tonnes of CO2 over the life of the field. After 2022, Johan Sverdrup will also provide power from shore to other fields on the Utsira High, including Edvard Grieg, Ivar Aasen and Gina Krog.
  • The Johan Sverdrup field is developed in two phases. Phase 1 was approved by Norwegian authorities in 2015 and came on stream in October 2019. Phase 2 of the development was approved in 2019 and is expected to start production in Q4 2022.
  • PARTNERS: Equinor: 42.6% (operator), Lundin Norway: 20%, Petoro: 17.36%, Aker BP: 11.5733% and Total: 8.44%.

PHASE 1

  • Included the development of four platforms (accommodation and utility platform, processing platform, drilling platform, riser platform), three subsea installations for water injection, power from shore, export pipeline for oil (Mongstad) and gas (Kårstø).
  • Contracts awarded in phase 1 amounted to more than NOK 60 billion. Over 70% of the suppliers had a Norwegian billing address.
  • Production capacity: 440,000 barrels of oil per day.
  • Capital expenditures: NOK 83 billion (nominal terms based on fixed currency).
  • Production start-up: October 2019.

PHASE 2

  • Includes development of another processing platform (P2), modifications of the riser platform and the field centre, five subsea templates, in addition to the power-from-shore supply to the Utsira High (including the Edvard Grieg, Ivar Aasen and Gina Krog fields) by 2022.
  • Contracts awarded so far in phase 2 amount to more than NOK 20 billion. 85% of the contracts have been awarded to suppliers in Norway.
  • Production capacity: 220,000 barrels of oil per day.
  • Capital expenditures: estimated at NOK 41 billion (nominal terms based on fixed currency).
  • Production start: Q4 2022 (expected).