Giant North Sea oil field going full throttle as Phase 2 comes on stream
Norwegian state-owned energy giant Equinor has started production from the Johan Sverdrup Phase 2 project in the North Sea off Norway, ensuring that the entire field is now online. The majority of the oil and gas output from this field is expected to head for Europe, strengthening its energy security.
While announcing the start of production at this project on Thursday, Equinor disclosed that once the Johan Sverdrup field reached plateau production, every third Norwegian oil barrel would come from the giant field, expected to be “essential to ensuring high and stable energy deliveries” from Norway in the coming decades.
Geir Tungesvik, Equinor’s executive vice president for Projects, Drilling & Procurement, remarked: “The entire Johan Sverdrup field is now on stream. This is a red-letter day for us and our partners, Aker BP, Petoro and TotalEnergies, but also for Norway and Europe. Johan Sverdrup accounts for large and important energy deliveries, and in the current market situation, most of the volumes will go to Europe.”
As the Johan Sverdrup field will produce 720,000 barrels of oil daily at a plateau, aiming to rise to 755,000 barrels per day, Equinor highlights that this field alone can meet 6-7 per cent of the daily oil demand in Europe with recoverable volumes totalling 2.7 billion barrels of oil equivalent.
“It has been challenging, and I would like to send a big thank you to everyone who has helped bring the project safely to the finish line, both partners, our own employees and, not least, the suppliers,” added Tungesvik.
Consisting of a new platform, five new subsea systems, 28 new wells, a new module for the existing riser platform, and facilities to send power from shore to the Utsira High area, the Johan Sverdrup Phase 2 project was “delivered as planned, on time and cost, despite the Covid-19 pandemic,” outlines the company.
Furthermore, more than 90 per cent of deliveries to Johan Sverdrup Phase 2 have a Norwegian billing address, and many of the suppliers were also involved in the first part of the development of this project. The full-field development of Johan Sverdrup has a break-even price of less than $15 per barrel.
The Norwegian contractors, Aibel and Aker Solutions, delivered several offshore platforms for this field and since production started in 2019, the two firms have been delivering M&M services under an existing agreement. Back in March 2022, Aibel completed and delivered the second processing platform (P2) for the Johan Sverdrup project, which is the fifth and final platform for this field. This platform was installed using the Allseas-owned and world’s largest heavy-lift vessel, Pioneering Spirit, a few days later.
The field receives power from shore through cables from Haugsneset north of Stavanger. While the first cable currently supplies the first four platforms on the Johan Sverdrup field with electricity, the new cable supplies the fifth platform and the rest of the Utsire High installations.
Marianne M. Bjelland, vice president, exploration and production, the Johan Sverdrup and Martin Linge areas, commented: “In combination, this reduces CO2 emissions by a total of 1.2 million tonnes per year, equivalent to 2,5 per cent of Norway’s annual emissions. Electrification is an important measure to further developing the Norwegian continental shelf (NCS) towards the goal of net zero greenhouse gas emissions by 2050.”
Moreover, Equinor underscores that the Johan Sverdrup field has been in stable production mode for more than three years. It is estimated to generate more than 3,400 person-years of work each year, and production from the field has already contributed substantially to the Norwegian welfare state with 82 per cent of the revenues from the field going to the state through taxes and direct ownership interest, estimated at a total of about NOK 900 billion (over $92 billion) over the field life.
“I am proud that we have now put the entire Johan Sverdrup field on stream in a safe and secure manner. We will deliver stable energy volumes for several decades, while contributing to Norwegian value creation for a long time to come,” concluded Bjelland.
Equinor outlines that the investments in the Johan Sverdrup Phase 2 project total NOK 48 billion (over $4.9 billion) based on the data available in 2022. The oil from this field is transported by pipeline to Mongstad, whereas the gas is piped to Kårstø, and from there to the continent.
With estimated resources of 2.7 billion barrels of oil equivalent, the Johan Sverdrup field, located on Utsira High in the central part of the North Sea in a water depth of 110-120 metres, is the third-largest oil field on the Norwegian continental shelf. The field, discovered in 2010, has an estimated 50-year lifespan.
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