Norwegian energy company Equinor said it has started production from the Utgard gas and condensate field, spanning the Norwegian-UK border in the North Sea.
Recoverable resources are estimated at around 40 million barrels of oil equivalent (boe) and daily production on plateau will be around 43,000 boe, Equinor said. The company expects the field will produce beyond 2025.
Equinor is operator, while Poland's Lotos and Kuwait's KUFPEC also hold interests in the field.
The NOK 2.6 billion development consists of two wells from a subsea template tied back to the Sleipner field by a pipeline and an umbilical. The template is installed on the Norwegian side of the border, with one well on each side.
The field was discovered in 1982 and a development has been considered several times. In 2016, Equinor acquired the UK share of the discovery to realize the development, which has become a profitable project even with substantially lower oil prices than we see today.
The plan for development and operation and the field development plan were submitted to Norwegian and UK authorities in 2016. At that time the cost estimate was NOK 3.5 billion (fixed NOK), and start-up was scheduled for the end of 2019.
The project is delivered without any personal injuries, ahead of schedule and 25% below the cost estimate, Equinor said.
“I am proud of the Utgard project being delivered at NOK 900 million below the cost estimate and ahead of schedule, but first and foremost of the project being delivered without personal injuries,” said Anders Opedal, executive vice president for Technology, Projects and Drilling in Equinor.
It is the first time Equinor leads a field development for recovering resources across the border between the Norwegian and UK continental shelves.
“Good and efficient cross-border cooperation with both licence partners and authorities has made the Utgard development possible, and I am pleased that we found solutions ensuring proper resource management on both sides,” Opedal said.
“Through Utgard, we are maximizing economic recovery from the North Sea, and unlocking high value, low carbon intensity barrels in line with our strategy. We will continue to seek cross-border opportunities to add value on both sides of the border,” said Arne Gürtner, senior vice president for UK and Ireland Offshore in Equinor.
Utgard will be remote-operated from the Norwegian Sleipner field, where the well stream will be processed before dry gas is transported to the market through the Gassled pipeline system, and liquids are sent through the existing pipeline to Kårstø for further export to Europe. Utgard will also utilize Sleipner’s facility for CO2 purification and storage.
“By reusing the existing infrastructure, we can, with relatively low investments, realize smaller discoveries that would not otherwise have been profitable enough to develop. At the same time, we are adding valuable volumes to Sleipner,” said Arne Sigve Nylund, executive vice president for Development and Production Norway in Equinor.