Vår Energi starts up Jotun FPSO, awards maintenance deal for two further offshore Norway hubs

Vår Energi has started production through the upgraded Jotun FPSO in the Balder area of the Norwegian North Sea.

This will extend the life of the Balder Field in PL001, originally developed by Exxon Mobil. With added production from tie-ins of other fields and accumulations in the area, the FPSO should remain in service through 2045 or beyond.

Within three to four months, the company expects production to increase steadily by about 80,000 boe/d, on top of the existing rate of 30,000 boe/d through the Balder FPU and Ringhorne facilities. 

Estimated operating cost for the FPSO is about $5/bbl, with estimated recoverable reserves from the project at 150 MMboe.

“Together with the recent startups of Halten East and Johan Castberg, this marks a key milestone in reaching our production target of more than 400,000 boe/d in the fourth quarter of this year,” said Vår Energi CEO Nick Walker. “All 14 production wells have been completed and will be brought onstream during the rampup period to reach peak production. Together with the Balder Phase V project starting up later this year, the project has a payback time of around two years.

“In addition, with the Jotun FPSO installed as an area host, Vår Energi is taking necessary steps to add new production through infill drilling, exploration and tie-back developments with short time to market.

Vår Energi operates the Balder Field with a 90% interest, and the remaining 10% is held by Kistos Energy Norway.

In addition, Vår Energi has awarded Aibel a five-year, NOK1.2 billion (US$118 mllion) maintenance and modification contract to Aibel covering the Goliat and Gjøa fields in the Barents Sea and North Sea. There are options for three two-year extensions.

Due to the common industry challenges across the Norwegian Continental Shelf and rising costs, the focus of this contract will be on operational efficiency, improvement planning for the two companies’ joint work processes, synergies, local content and competence in new early-phase projects around the two production hubs. 

Last week, Vår Energi and partner Kistos announced FID on a fast-track development in the Balder area. The Balder Phase VI project will recover about 15 MMboe of reserves at an estimated cost of NOK 2.6 billion ($260 million). According to Vår Energi, the breakeven should be well below $35/bbl with payback expected less than a year from the planned start of production at the end of 2026 (at current prices).