Production has started at giant North Sea field Johan Sverdrup, according to Equinor, which is developing the project in partnership with Lundin Norway, Petoro, Aker BP and Total. This puts the project two months ahead of schedule, and $4.4bn under budget.
“Johan Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers,” said Eldar Sætre, president and CEO of Equinor. “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. Johan Sverdrup is expected to generate income from production of more than NOK 1400 billion [$153.9bn] of which more than NOK 900 billion [$98.9bn] to the Norwegian state and society.”
Johan Sverdrup has expected recoverable reserves of 2.7bn barrels of oil equivalent and the field is expected to produce up to 660,000 barrels of oil per day at peak. Powered with electricity from shore, the field has record-low CO2 emissions of less than 1 kg per barrel.
The break-even price for the full-field development is less than $20 per barrel. After reaching plateau for the first phase, anticipated during the summer of 2020, expected operating costs are below $2 per barrel. The operator also expects cash flow from operations of around $50 per barrel in 2020, based on a real oil price of $70 per barrel, partly as a result of the phasing of tax payments in the ramp-up phase.
Equinor noted that the field leverages new technology and digitalisation, with Equinor’s executive vice president for technology, projects and drilling Anders Opedal noting that “The qualification of new installations technology has reduced safety risk, saved more than two million offshore hours and shaved months of the development schedule. We have also invested in digital solutions and ways of working to boost oil recovery, optimise production and improve field operations, and these new ways of working have already saved at least one month in the execution stage.”
