The ground-breaking Johan Sverdrup project in the North Sea will be larger, cleaner and more efficient than previously estimated. “The Johan Sverdrup field is the largest field development on the Norwegian shelf since the 1980s,”states Eldar Sætre, the CEO of Equinor (formerly known as Statoil) in a statement to the press. “At plateau, the field will produce up to 660,000 barrels per day, with a breakeven price of less than USD $20 per barrel and very low CO2 emissions of 0.67 kg per barrel. Johan Sverdrup is on track to deliver vast volumes of energy with high profitability and low emissions for many decades to come.”
Equinor and its partners announced an increased resource estimate while at the same time reducing the total estimated investment for both Phase 1 and Phase 2 of the development by an additional NOK 6 billion since February of this year (NOK 10 million = approx. EUR €1 million). “Since the PDO for the first phase in 2015, we have reduced the total estimated investment for Johan Sverdrup full field development by more than NOK 80 billion. The project will yield even greater value creation and larger spin-off effects than previously estimated,” says Sætre.
Full field development of Johan Sverdrup is projected to contribute more than NOK 900 billion in income to the Norwegian State over the lifetime of the field. An updated analysis from Agenda Kaupang estimates that the development of Johan Sverdrup Phase 1 and Phase 2 can contribute more than 150,000 man-years in Norway in the period from 2015-2025. In the operations phase, Johan Sverdrup may generate employment of more than 3400 man-years every year.
Further improvement in the project
“We have completed nearly 80% of the first phase of the development, and it is gratifying to see that the good momentum and quality of the construction phase seems to be continuing in the installation phase offshore. This means that we are on track to start production from the field in November next year,” says Margareth Øvrum, Executive vice president for Technology, projects & drilling in Equinor. “The continued high quality of project execution is a result of close cooperation with our suppliers and partners. Together, we have managed to reduce the estimated investments for Phase 1 by an additional NOK two billion,” says Øvrum.
The updated investment estimate for Phase 1 is now NOK 86 billion, a reduction of 30%, amounting to NOK 37 billion since submission of the Phase 1 PDO.
“We have worked systematically to make the second phase of the Johan Sverdrup development even more profitable and robust. We have taken the good solutions and experience gained from Phase 1 and have optimised the development concept for Phase 2 in cooperation with our partners and suppliers. In the Phase 2 PDO, we have reduced the investment estimate to NOK 41 billion, and the break-even price for Phase 2 is now less than USD 25 per barrel. Throughout the entire history of this industry, I don’t think we have ever seen a project that has been improved as much as Johan Sverdrup has over the last 3 years,” says Øvrum.
Production start-up for the Phase 2 development is planned for Q4 2022. “The sheer size and the field life of more than 50 years make Johan Sverdrup an exciting place to develop the solutions of the future. We are now working to mature technology for automatic production optimisation, a number of new pipe and seabed technology solutions, and a gradual development of a digital twin of Johan Sverdrup that will give us the opportunity to model and visualise key parts of the field even before we start production for Phase 2 in 2022,” says Øvrum.