Johan Sverdrup Phase 2 development decision agreed by partnership

Maersk Oil and partners in the Statoil-operated Johan Sverdrup development have agreed to proceed with the front end engineering design (FEED) for Phase 2 of the giant, world-class Norwegian project.

The investment decision and submission of the plan for development and operation of Phase 2 is expected in the second half of 2018. Phase 2 is scheduled to come on stream in 2022. Phase 1 of Johan Sverdrup is under development, with first oil scheduled for late 2019.

Phase 1 of the development establishes a field center consisting of four platforms on the field. Phase 2 builds on this infrastructure, adding another processing platform to the field center. Overall this will result in an increase in processing capacity from 440,000 barrels of oil per day (boepd) in Phase 1, to 660,000 boepd for the full field (Phase 1 and 2 combined).

Phase 2 also includes the development of the Avaldsnes (east), Kvitsøy (south) and Geitungen (north) satellite areas to be phased in for processing and export on the field center. In total, 28 new wells are planned for the Phase 2 development.

The Phase 2 concept also includes the establishment of an area-wide solution for ‘power from shore’ for the Utsira High by 2022.

Capital expenditure for Phase 2 is estimated at between NOK 40 – 55 billion. Full-field development breakeven price is now less than $25 per barrel.

“Together with partners and the operator, Statoil, I am proud that Maersk Oil has played a full part in optimizing this world-class development and enhancing value for Norwegian society,” Gretchen Watkins, Maersk Oil CEO, said. “To date, Johan Sverdrup has been a reference case for world-class project execution. We aim to continue demonstrating this as we look ahead to delivering first oil in Phase 1 and setting ourselves up for further success in Phase 2.”