Johan Sverdrup on track for 2019 start-up

OREANDA-NEWS. June 11, 2015. Norwegian state-controlled oil firm Statoil said today that it remains on course to start up the giant Johan Sverdrup field in the North Sea in late 2019, after awarding a contract to build the topside for the utility and living quarters platform to engineering firms Kvaerner and KBR.

The deal — worth 6.7bn Norwegian kroner (\\$840mn) - marks the latest in a string of Johan Sverdrup contracts handed out since Statoil and its partners reached a final investment decision on the first phase of the project in February. Norwegian firm Aibel secured a contract worth over Nkr8bn to construct the deck of the Johan Sverdrup drilling platform later that month. And separate power supply and topside installation contracts were awarded in March. All of the contracts are subject to the Norwegian parliament approving the development plan later this year.

Industry-wide spending cuts since oil prices started to fall in the middle of last year have led to a wave of project deferrals. But Johan Sverdrup has proved immune to the investment slowdown because of its scale and quality. The first phase will develop 1.4bn-2.4bn bl of oil equivalent (boe) of recoverable resources at an estimated cost of Nkr117bn. It will comprise four platforms and have a production capacity of 315,000-380,000 b/d of oil equivalent (boe/d). Statoil plans further phases. It forecasts that production will rise to 550,000-650,000 boe/d when the field is fully developed, accounting for a quarter of all Norwegian oil and gas production.

The Norwegian Petroleum Directorate has cast doubt on Statoil's target to start up Johan Sverdrup in 2019, saying earlier this year that the project could be delayed by six months. But Statoil is sticking by its timeline. "We have now awarded the project's second main topside construction contract, and we are on schedule to meet an ambitious field development plan with production start on Johan Sverdrup at the end of 2019," Statoil's senior vice-president for Johan Sverdrup, Oivind Reinertsen, said.

The Johan Sverdrup licensees are Statoil, Swedish independent Lundin Petroleum, Norway's Det Norske, Denmark's Maersk Oil and Norwegian state-owned oil and gas holding company Petoro. The partners have recommended Statoil as operator for all field phases.