Discovered by Lundin Petroleum in 2010, the Avaldsnes discovery at PL501 is the 5th largest discovery made on the Norwegian Continental Shelf, one that has more than doubled the market cap of this Swedish oil and gas company.
Together with PL265 and PL502, and spread out over 200 square kilometers of ocean, they will eventually form the Johan Sverdrup development, a field which will soon be developed according to a new concept announced today.
“This is historic. We have not made a concept selection for a field this size since the 1980s,” commented Arne Sigve Nylund, Statoil’s EVP for Development and Production.
In a presentation today, Lundin notes that Phase 1 of the Johan Sverdrup development will require a gross capital investment of between NOK 100 – 120 billion and consist of one processing platform, one riser platform, one wellhead platform with drilling facilities and one living quarter platform. The platforms, which will be installed in 120 meters of water, will be installed on steel jackets and will be bridge-linked.
The field partners anticipate that between 40 and 50 production and injection wells will be drilled to support Phase 1 production, of which 11 to 17 wells will be drilled prior to first oil with a semi-submersible rig to facilitate Phase 1 plateau production.
The Johan Sverdrup development ownership is broken down as follows, by license:
PL501: Lundin Norway AS (40%, op), Statoil Petroleum AS (40%), Maersk Oil Norway AS (20%)
PL265: Lundin Norway AS (10%), Statoil Petroleum AS (40%, op), Det norske oljeselskap ASA (20%), Petoro (30%)
PL502: Statoil Petroleum AS (44.44%, op), Det norske oljeselskap (22.22%), Petoro (33.33%)
Upon completion in 2019, Statoil anticipates gross production capacity of between 315,000 and 380,000 boepd via a 274 kilometer, 36″ oil pipeline to the Mongstad oil terminal, and a dedicated 165 kilometer, 18″ gas pipeline to Kårstø gas terminal. Statoil notes that the export pipelines will cost upwards of NOK 11 billion and that the facilities will be powered via 80MW of DC power from shore, reducing total CO2 emissions from the Utsira High area by 60-70%.
The field partners anticipate subsequent development phases to support a field lifetime of 50 years, with an anticipated plateau production of 550,000-650,000 barrels of oil equivalent/day (boe/d) field capacity. “The ambition is a recovery rate of 70% for the full field,” commented Øivind Reinertsen, Statoil’s SVP of the Johan Sverdrup field.
Ashley Heppenstall, President and CEO of Lundin Petroleum comments:
“Following the discovery of the Johan Sverdrup field by Lundin Petroleum in 2010 the concept selection decision is a major milestone for Lundin Petroleum, our Johan Sverdrup partners and the Norwegian society. The development of this field will be one of the largest project undertakings in the North Sea since the 1980’s. The quality, size and location of this field are a unique combination and as a result we believe it will create significant value for all stakeholders. It is often quoted in the oil industry that big oil fields get bigger and we certainly believe that this will be the case for Johan Sverdrup. On the Norwegian Continental Shelf a number of the larger mature fields are achieving recovery factors at or exceeding 70 percent and it will be the objective to achieve similar results for Johan Sverdrup.”
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