Johan Sverdrup field to reach plateau production earlier than expected
The Equinor-operated Johan Sverdrup field in the North Sea is expected to reach plateau production for the first phase in early May, which is earlier than anticipated.
Equinor said on Monday that, due to higher plant capacity, plateau production would increase from around 440,000 barrels of oil per day to around 470,000 barrels per day.
According to Equinor, the plateau production was previously expected to be reached during the summer. At the end of March, daily production had already exceeded 430,000 barrels of oil.
“The project was sanctioned during the oil price fall in 2015 and resulted in important activity to the supplier industry in a demanding period. With low operating costs Johan Sverdrup provides revenue and cashflow to the companies and Norwegian society at large in a period affected by the coronavirus and a major drop in the oil price. In today’s situation, cooperation between operators, suppliers and authorities is more important than ever to maintain activity and value creation”, says Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.
“Field production has been very good and stable from day one, and the wells have produced even better than expected”, said Rune Nedregaard, vice president for Johan Sverdrup operations.
“We are currently completing the tenth well. This work is progressing smoothly, helping reach higher production earlier than expected. We also expect to increase plant capacity, allowing plateau production to increase from the previously expected 440,000 barrels to around 470,000 barrels of oil per day.”
The Johan Sverdrup field came on stream on October 5 last year, more than two months ahead of the original schedule and NOK 40 billion ($3.8Bn) below the original estimate for development and operation (PDO August 2015).
Low production costs
The breakeven price for the full-field development is below $20 per barrel, and expected operating costs are below $2 per barrel and it will produce at a carbon intensity of less than 1 kilogram of CO2 per barrel.
“Johan Sverdrup has very low production costs, contributing with a strong cashflow also in periods with low prices, as we experience”, said Nedregaard.
At plateau in phase two the field will produce 690,000 barrels of oil per day. Expected recoverable reserves in the field are 2.7 billion barrels of oil equivalent.
Equinor’s ambition for the field is to achieve a recovery factor of more than 70 per cent.
“We are working systematically with our partners to increase value creation from the field and ensure an optimal recovery factor”, said Nedregaard.
Equinor is the operator of the Johan Sverdrup field with a 42.6 per cent interest and its partners are Lundin Norway with 20 per cent, Petoro with 17.36 per cent, Aker BP with 11.5733 per cent, and Total with the remaining 8.44 per cent interest.
Alex Schneiter, President and CEO of Lundin Petroleum, commented: “In this current time of oil market uncertainty, a field like Johan Sverdrup with operating costs below $2 per barrel, provides us with one of the lowest cost and highest quality fields in the world and delivers strong cashflow resilience and certainty to our business.”