Equinor and its partners Lundin Norway, Petoro, Aker BP and Total are preparing for the production start from the Johan Sverdrup field in October this year, one month ahead of schedule and two months ahead of original plans. Equinor also presents updated operating costs and strong cash flow estimates for the initial year of production.
Since the Plan for development and operation (PDO) for Phase 1 of the Johan Sverdrup project was submitted in 2015, the project has seen both a significant cost reduction as well as an acceleration in the start-up schedule of the large development from late December 2019 to now October.
“Around this time last year, we accelerated the expected schedule for production start-up of Johan Sverdrup to November 2019. Now, as we enter the final stretch of the project, we believe it is possible to start production up to one month earlier,” says Anders Opedal, executive vice president for Technology, projects & drilling in Equinor.
“Being in the position to potentially accelerate first oil for a mega-project like this, demonstrates the high quality of execution in the Johan Sverdrup development. This is to a large extent due to the close collaboration with our partners and suppliers since day one in the project,” says Opedal.
The current focus of the Johan Sverdrup project is on completing the testing of the equipment and systems needed for the full field center – spanning four platforms and three interconnected bridges and associated modules – to function and perform as one installation.
After reaching plateau for the first phase of the Johan Sverdrup development, expected during the summer of 2020, Equinor expects operating costs below $2 per barrel. The operator also expects cash flow from operations of around $50 per barrel in 2020, based on a real oil price of $70 per barrel, partly as a result of the phasing of tax payments in the ramp-up phase.
During phase 1, Johan Sverdrup will produce 440 Mbopd, increasing to 660 Mbopd after phase 2 commences in the fourth quarter 2022. At phase 2 plateau, Johan Sverdrup will contribute up to 25 percent of Norway’s total production of oil and gas, while power from shore gives the field carbon emissions intensity of just below one kg CO2 per barrel, which is among the lowest in the world and 25 times lower than the oil and gas industry average.
Johan Sverdrup is the third largest oil field on the Norwegian shelf – measured in reserves. Only Statfjord and Ekofisk, both also in the North Sea, are larger. The field is located 155 kilometers west of Karmøy and 40 kilometers south of the Grane field.