Since the plan for development and operation (PDO) of the Johan Sverdrup field was approved by Norwegian authorities, Statoil has cooperated with partners, authorities and suppliers on improving the offshore oil & gas project.
The positive development of investment costs for Johan Sverdrup continues.
Check out this cool video showing the building of the Johan Sverdrup!
The first phase is currently estimated at NOK 99 billion, (Capex numbers in nominal terms based on project currency) a reduction of NOK 24 billion since the PDO was submitted. The present break-even is reduced to below USD 25 per barrel for phase 1.
The improvements for phase 1 have been achieved by higher drilling and well efficiency and high quality in project planning and execution.
The Johan Sverdrup project will be developed in several phases, and a comprehensive effort has been made to develop the concept for full-field development of Johan Sverdrup. The estimate for the full-field investment has been improved from a range of NOK 170–220 billion in 2015 to NOK 140–170 billion (2016 value).
The improvements made for the Johan Sverdrup full-field development are mainly a result of optimisation and simplification of the development concept for future phases, in close cooperation with the supplier industry.
Statoil has also focused on removing bottlenecks in the facilities to expand processing capacity on the Johan Sverdrup field centre. The work on optimising the processing facility for phase 1 has been successful. Phase 1 production capacity is currently estimated at 440,000 barrels of oil per day. The PDO originally estimated the phase 1 production capacity to be between 315,000 and 380,000 barrels of oil per day.
So far, the Johan Sverdrup partners agree on expanding the production capacity on Johan Sverdrup by introducing an extra processing platform on the field centre. This will increase the expected full production capacity on the Johan Sverdrup full field to 660.000 barrels of oil per day. The PDO estimated full production from Johan Sverdrup to be 550,000–650,000 barrels of oil per day. Final concept selection for future phases will be decided upon project pre-sanction (DG2).
Statoil has worked on deepening its understanding of the reservoir, in collaboration with its partners. This has reduced the uncertainty of the reserve estimate for the whole field. Since the PDO for the first phase was submitted the range of the full-field resource estimate has improved from 1.7-3.0 to 1.9-3.0 billion barrels of oil equivalents.
The capacity increase, together with improved reserve estimate and investment costs, has helped reduce the break-even for the full-field development of Johan Sverdrup to below USD 30 per barrel.
The PDO for phase 1 of Johan Sverdrup originally called for project pre-sanction (DG2) of future phases in 2016 and investment decision at the end of 2017. According to an updated plan the project pre-sanction will be made in the first half of 2017, and a final investment decision will be reached and PDO will be submitted in the second half of 2018. Full-field production start will be 2022, as originally planned.