STAVANGER, Norway– Since the plan for development and operation (PDO) of the Johan Sverdrup field was approved by Norwegian authorities in August 2015, Statoil has cooperated with partners, authorities, and suppliers on improving the project.
The first phase is currently estimated at NOK 99 billion ($12 billion), a reduction of NOK 24 billion ($3 billion) since the PDO was submitted. The present break-even is less than $25/bbl for Phase 1.
Statoil says the improvements for Phase 1 have been achieved by higher drilling and well efficiency and high quality in project planning and execution.
TheJohan Sverdrup project will be developed in several phases, and a comprehensive effort has been made to develop the concept for full-field development. The estimate for the full-field investment has been improved from a range of NOK 170-220 billion in 2015 to NOK 140-170 billion ($17-20.5 billion) in 2016.
The improvements made for the Johan Sverdrup full-field development, the operator says, are mainly a result of optimization and simplification of the development concept for future phases, in close cooperation with the supplier industry.
Statoil CEO Eldar Sætre said: “We are now seeing the results of good cooperation between Statoil, its partners, and suppliers. We are strongly reducing investment costs, and we are increasing the process capacity, resource estimate, and value of the field. Johan Sverdrup is a world-class project, and we want to create high value for the owners and society for generations.”
Partners in Johan Sverdrup are Statoil 40.0267% (operator), Lundin Norway 22.6%, Petoro 17.36%, Det norske oljeselskap 11.5733%, and Maersk Oil 8.44%.
Statoil has also focused on removing bottlenecks in the facilities to expand processing capacity on the Johan Sverdrup field center. Phase 1 production capacity is currently estimated at 440,000 b/d of oil. The PDO originally estimated the Phase 1 production capacity to be between 315,000 and 380,000 b/d of oil.
So far, the partners agree on expanding the production capacity on Johan Sverdrup by introducing an extra processing platform on the field center. This will increase the expected full production capacity on the Johan Sverdrup full field to 660,000 b/d of oil. The PDO estimated full production to be 550,000-650,000 b/d of oil.
The partners have also worked on deepening their understanding of the reservoir. Since the PDO for the first phase was submitted the range of the full-field reserve estimate has improved from 1.7-3.0 to 1.9-3.0 Bboe.
The capacity increase, together with improved reserve estimate and investment costs, has helped reduce the break-even for the full-field development of Johan Sverdrup to less than 30/bbl.
Margareth Øvrum, executive vice president for Technology, Projects & Drilling in Statoil, said: “We will continue our improvement effort, and Statoil and its partners have decided to spend more time on this work until project pre-sanction and a final investment decision has been reached for future phases.
“At the same time we want to stay on schedule for full-field production start and for establishing an area solution for land-based power by 2022, as per conditions stated in the approved PDO for Phase 1.”
The PDO for Phase 1 originally called for project pre-sanction (DG2) of future phases in 2016 and investment decision at the end of 2017. According to an updated plan the project pre-sanction will be made in the first half of 2017, and a final investment decision will be reached and PDO will be submitted in the second half of 2018. Full-field production is expected to start in 2022.