Statoil is decreasing cost estimates for the first phase of the giant Johan Sverdrup field by up to 42%, with development costs expected to decrease further, according to partner Det norske.
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Illustration of the Johan Sverdrup field. Courtesy of Statoil. |
As one of the five biggest oilfields on the Norwegian continental shelf, the Johan Sverdrup field is located on the Utsira High about 155km west of Stavanger. At 110-120m water depth, the field covers about a 200sq km area with the reservoir at around 1900m.
Costs for the first phase are now estimated to be US$12.2 billion (NOK 108.5 billion), representing a 42% drop. The anticipated costs for full-field development have been reduced to between $18-21 billion (NOK 160 billion – 190 billion).
In September 2015, Statoil cut cost by more than $1 billion (NOK 9 billion) for the first phase. At that time, an updated preliminary capex estimate showed a 7.3% decrease to $13.3 billion (NOK 114 billion), from nearly US$14.4 billion (NOK 123 billion) in nominal terms.
“The development costs of the field are expected to decrease further,” Det norske said.
Phase one of the multi-phase project includes four bridge-linked platforms, three subsea water injection templates, a field center, wells, oil and gas export solutions, and power from shore. The authorities also approved associated plans for the installation and operation for transportation pipelines and power supply from shore.
Det norske also said that through an independent third-party evaluation and certification carried out by AGR, Johan Sverdrup’s reserves are estimated to be 303 MMboe.
“Debottlenecking” of the production facility for phase 1 has also been decided, with the aim of increasing production capacity beyond the upper end of the PDO estimate of 315,000 – 380,000 boe/d, Det norske's report said.
Johan Sverdrup is expected to have resources of between 1.7-3 billion boe, with first oil planned for late 2019.
Daily production from phase one is estimated at 315,000-380,000 b/d. Full production is estimated at 550,000-650,000 boe/d, which will account for about 40% of total Norwegian Continental Shelf oil production. The ambition is a recovery rate of 70%, allowing for advanced technology for increased oil recovery (IOR) in future phases.
Statoil is the operator of the Johan Sverdrup field with 40.0267% interest. Partners include Lundin Norway (22.6%), Petoro (17.36%), Det norske oljeselskap (11.5733%) and Maersk Oil (8.44%).
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