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Increased value creation, more resources and greater ripple effects from Johan Sverdrup

Today, Equinor and the Johan Sverdrup partnership of Lundin Norway, Petoro, Aker BP and Total, are submitting the development plan for the second phase of the project to the Norwegian Ministry of Petroleum and Energy.

With an increased resource estimate and lower investment costs, the full field development of Johan Sverdrup will contribute to even greater value creation. At the same time, the ripple effects from the project will be larger than previously estimated. Low CO2 emissions make Johan Sverdrup one of the world’s most carbon-efficient fields.

“The Johan Sverdrup field is the largest field development on the Norwegian shelf since the 1980s. At plateau, the field will produce up to 660,000 bbl/day, with a break-even price of less than USD 20 per bbl and very low CO2 emissions of 0,67 kg per bbl. Johan Sverdrup is on track to deliver vast volumes of energy with high profitability and low emissions for many decades to come,” Eldar Sætre, Equinor CEO, said.

“Today we are announcing an increased resource estimate and we are reducing the total estimated investment for both Phase One and Phase Two of the development by an additional NOK 6 billion since February of this year. 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,” Sætre said.

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 One and Phase Two 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 3,400 man-years every year.

The Plan for development and operation (PDO) for Johan Sverdrup Phase Two also includes measures to facilitate power from shore to the Utsira High by 2022, in accordance with the terms for PDO Phase One. Emission savings from the Johan Sverdrup field are estimated at 460,000 tonnes of CO2 per year, which is equivalent to annual emissions from 230,000 private cars.

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,” Margareth Øvrum, Executive Vice President for Technology, Projects & Drilling in Equinor, said. “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 One by an additional NOK two billion.”

“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 One and have optimized the development concept for Phase Two in cooperation with our partners and suppliers. In the Phase Two PDO, we have reduced the investment estimate to NOK 41 billion (nominal NOK, project exchange rate), and the break-even price for Phase Two is now less than USD 25 per bbl. 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 three years,” Øvrum said.

Digitalization and technology increase the resource estimate for Johan Sverdrup

In connection with the development of Phase Two, Equinor and the Johan Sverdrup partnership have established a full field digitalization and technology plan to further reinforce safety and efficiency in operations, increase value and reduce carbon emissions from the field.

A number of improved recovery technologies are included in the plan:

  • Water alternating gas injection (WAG)
  • PRM (permanent reservoir monitoring) for the full field
  • Stepwise implementation of fibre optics in wells
  • Step-by-step development of digital twinning
  • Technologies for automatic drilling control on the drilling platform
  • High-speed telemetry drill pipe
  • Improvements in cement quality
  • Virtual rate monitoring on subsea wells

“Johan Sverdrup will be best in class on digitalization and new technology. Digitalization will reinforce the effect of several improved recovery technologies. Together, this has allowed us to increase the resource estimate for Johan Sverdrup, while simultaneously raising the ambitions for the field’s recovery rate to over 70%. This will make Johan Sverdrup a world leader also in terms of the improved recovery,” Øvrum said.

In the Phase Two PDO, the resource estimate for the entire Johan Sverdrup field is raised from 2.1-3.1 billion bbl of oil equivalent to 2.2-3.2 billion bbl, with an expected estimate of 2.7 billion bbl.

“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 optimization, 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 visualize key parts of the field even before we start production for Phase Two in 2022,” Øvrum said.

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