Norway to Outline Johan Sverdrup Power Plan in Early 2015

Johan Sverdrup Development rendering courtesy Statoil

OSLO, Sept 22 (Reuters) – The Norwegian government said on Monday it would outline plans in spring next year regarding the electrification of the $20 billion Johan Sverdrup oil field in the North Sea.

However it did not say what it would propose about the timetable for providing power from land to the field, which is Norway’s largest industrial project in decades and expected to generate thousands of jobs and large state revenues.

The project was thrown in doubt earlier this year when opposition parties, who hold a majority in parliament, called for it to use electricity from shore rather than generating it on the platforms with natural gas or diesel.

This would be a more environmentally friendly option, but joint operator Statoil said it could push up costs and delay the project.

In June parliament agreed that electrification should happen “as soon as possible and to be in place by the latest in 2022”, following weeks of dispute.

However the government announcement on Monday came after the Norwegian oil directorate dampened down hopes electrification could happen in the next few years. The directorate said it would not be possible to provide power from land to the giant field before it starts producing oil in 2019, without significantly delaying its development.

“The government will address again the question of how fast we can put a solution in place with a parliamentary motion about the Sverdrup development in the spring of 2015,” Oil and Energy Minister Tord Lien said.

“Like parliament, I do not want the first phase of the development of the Sverdrup field to be delayed.”

Johan Sverdrup, which has a price tag of close to $20 billion for the initial development phase, has resources of up to 2.9 billion barrels of oil. Project partners are Norway’s Statoil and Det norske, Sweden’s Lundin Petroleum and Maersk Oil, a unit of Danish shipping company A.P. Moeller Maersk. (Reporting by Gwladys Fouche; Editing by Pravin Char)