Vår Energi sanctions further expansion of North Sea Balder area

Vår Energi ASA and partner Kistos Energy Norway have taken FID on the Balder Next New Wells project in Balder area of the Norwegian North Sea.

The first phase development of the development will feature seven new wells tied back to the Jotun FPSO, with start-up anticipated in late 2027. Vår Energi expects to recover 86 MMboe, up from the 75 MMboe planned previously, reflecting continued improvement following associated studies, with a breakeven target of around $30/boe.

Use of standardized solutions, pre-commitments and strategic partnerships should speed up execution and time to first oil, the company added.

Its long term plan is to generate more than 400,000 boe/d from the Balder area.

Following start-up last summer, the upgraded Jotun FPSO provides potential for tieback of new wells. From 2028 onwards the company plans decommissioning of the Balder FPU from 2028, and other measures to lower operating costs and emissions.

The company is operator (90%) of the Balder field, with Kistos holding 10%.

Vår Energi has also announced a series of deals on the Norwegian Continental Shelf, namely the acquisition of Pandion Energy’s E&P portfolio, a swap agreement with DNO Norge, and sales of part of its interests in the producing Goliat and Fenja fields to Orlen Upstream Norway and Concedo.

The transactions with Pandion should help the company sustain long-term production growth in the Gjøa and Åsgard areas of the North Sea and Norwegian Sea, while the swap arrangement with DNO should aid alignment of interests in the Ringhorne North development.

Through acquiring Pandion’s interests for $110 million, Vår Energi gains a 10% position in the Nova field in license PL418, a 20% interest in the Ofelia development (PL929), a 49% interest in the Sierra Solberg discovery (PL263), and various exploration licenses in the Gjøa area, including Annabelle (PL929), due to be drilled later this year.

Among these, Nova is currently the sole producing field tied to the company’s operated infrastructure in which it does not currently hold an ownership interest.

From DNO, Vår Energi has agreed to take a 15% interest in Ringhorne North (PL956) and 5% in Nova, in exchange for a 5% share in Gjøa (PL153) and the Gjøa Nord discovery, plus a balancing payment of $17.5 million.

“DNO has had a stake in every field tied back to Gjøa but not in the host itself…” said executive chairman Bijan Mossavar-Rahmani.

“With Kjøttkake, Cuvette, Ofelia, Cerisa and now Gjøa Nord, we have five Gjøa tie-backs heading for final investment decisions this year.”     

Vår Energi has also agreed to offload a 20% interest in the Goliat field in the Barents Sea to Orlen and a 25% interest in the Fenja field to Concedo (the total consideration is up to $350 million). On completion, the company will retain a 45% operated stake in Goliat and 50% in Fenja.

All the deals should close later this year pending approvals by the authorities.

Pandion, formed in 2016, had last year agreed divestment of its interests in the Valhall and Hod fields, and the Slagugle and Mistral discoveries.