Norwegian Government submits proposal for Johan Sverdrup PDO to Parliament

On Friday, April 24, the Norwegian Government submitted a proposition to the Storting, the Norwegian Parliament, for the Plan for Development and Operation (PDO) for the first development phase step on the Johan Sverdrup field in the North Sea.

Statoil and its partners in the project submitted their Plan for Development and Operation (PDO) for Johan Sverdrup, Phase one, to the Ministry of Petroleum and Energy, Norway in February 2015. The partnership consists of Statoil, Lundin Norway, Petoro, Det norske oljeselskap and Maersk Oil.

The Norwegian Petroleum Directorate (NPD) has been in close dialogue with the licensees to ensure the resources are managed in the best possible manner, the NPD said.

Johan Sverdrup is the largest development on the Norwegian shelf since Oseberg, where the PDO was submitted in 1984. The total investments for the first development phase, as well as the transport systems, are estimated at NOK 117 billion ($15.16 billion).

NPD estimates higher costs

The NPD has prepared a separate cost estimate, which is about 10 billion 2015-NOK higher than the estimate in the PDO. The NPD says that according to its assessment, the most important reason for this is that production from the field will most likely be delayed by six months. Though the cost estimate is higher, it is well within the uncertainty range of plus/minus 20 per cent as indicated in the development plan.

Measures for improved recovery

Start-up of Johan Sverdrup is scheduled for December 2019, and the field’s resources provide a basis for production for about 50 years. The expected recovery is 352 million standard cubic metres (Sm3) of oil and 13.1 billion Sm3 of gas. This yields an oil recovery rate of 63 per cent. The operator, Statoil, has shown that various measures can lead to improved recovery, and consequently, a higher recovery rate. The NPD has encouraged licensees to choose measures that will contribute to this, and the plan facilitates the use of alternating water and gas injection. Adding polymer to the injection water is another measure that could improve recovery, and the NPD has been eager to ensure the method can be used, the press release reads.

More wells later on

The large resource volume and the extensive geographical scope necessitate the drilling of many wells on Johan Sverdrup. The drilling platform will therefore have a considerable number of available well slots so that more wells can be drilled later on. Flexibility in the development solution was a key point of the NPD’s follow-up. In order to safeguard future possibilities, a decision was made for the facilities to have available weight and space capacity so more equipment can be installed along the way.

Johan Sverdrup – lowest emissions and discharges on NCS

Johan Sverdrup is the sixth field on the Norwegian continental shelf that will have power from shore. Additional transmission capacity will be established by 2022 so that the fully developed Johan Sverdrup, as well as Gina Krog, Edvard Grieg and Ivar Aasen, can have the same solution.

The NPD says it is an advocate of cost-efficient measures that can reduce emissions to air and discharges to sea. Produced water will be cleaned and reinjected into the reservoir. Together with the power supply from shore, this will make Johan Sverdrup the field with the lowest emissions to air and discharges to sea per produced unit on the Norwegian continental shelf, the NPD concluded.

The proposition will be submitted to the Storting before summer.