FPSO nearing completion but changes made to North Sea oil project’s start-up date

Norwegian oil and gas player Vår Energi has revised its timeline for the first oil from a field life extension project in the North Sea offshore Norway, bumping it to the fourth quarter of 2024. Currently, the upgrade works on a floating production, storage, and offloading (FPSO) vessel, which is destined to operate at the field, are getting close to the finish line.

Vår Energi is involved in several development projects on the Norwegian Continental Shelf (NCS), in a bid to reach its target of producing around 400 kboepd by the end of 2025. Out of the nine sanctioned projects in the firm’s portfolio, six are now more than 50% complete. The larger developments in the company’s portfolio encompass its operated Balder X project and Equinor’s Johan Castberg where Vår Energi has a 30% stake.

Both of these developments are now targeting the first oil in the fourth quarter of 2024. Vår Energi plans to extend the lifetime of the Balder field through the Balder X project to extend production from the Balder hub beyond 2045. To this end, the company embarked on four projects, including the Balder FPU life extension through a vessel upgrade and drilling new wells on the Ringhorne III and Ringhorne IV projects.

The firm’s plan for the Balder field also entails an upgrade of the FPSO Jotun and the drilling of 14 new production wells along with one water injection well. In addition, the firm is considering drilling new exploration wells in the area. While the Balder X project is making “solid” progress towards completion, according to Vår Energi, the targeted first oil has been moved to 4Q 2024 based on inshore sail away in August 2024.

This is not the first change in the North Sea project’s schedule, as the start-up was initially anticipated in late 2023, but got pushed to 3Q 2024 during a revision of the project’s cost estimate. Currently, the upgrade of the FPSO Jotun is ongoing with high construction activity at the Rosenberg yard. Vår Energi highlights that the FPSO is more than 90% complete while “solid” progress has been achieved in increasing the pace of construction work.

Since the overall progress is “only slightly behind” the revised plan, the completion of the project is in sight. The company is now focused on executing the remaining construction and commissioning work while the drilling and subsea facilities activities are progressing in line with the schedule. Furthermore, the Norwegian firm will increase exploration activity in 2024 from 2023, with involvement in 16 planned wells.

These wells are targeting over 150 mmboe of net risked prospective resources. The boost in the firm’s hydrocarbon exploration search comes with an estimated annual spend of approximately $300 million. The company underlines that it has a clear path to 50% emissions reduction on operated fields by 2030 for Scope 1, thanks to its decarbonization initiatives such as the electrification of the Balder/Grane area, Balder area optimization with the FPSO Jotun in production, and the Balder FPU removal.

Moreover, Vår Energi’s key ongoing carbon mitigation efforts, which are currently in the execution stage are Sleipner, Fenja, Bauge (Njord), and Fram (Troll C) power from shore projects and the Statfjord Waste heat recovery project. The company is targeting methane emissions of around 0.025% in 2024, which it describes as well below near zero levels.

Vår Energi recently added new assets to its portfolios by completing the acquisition of Neptune Energy’s Norwegian oil and gas business, which entails 12 producing assets, of which three are operated and located in the company’s strategic hub areas, while seven are operated by Equinor.