Norwegian oil major Equinor and the Johan Sverdrup partnership of Lundin Norway, Petoro, Aker BP and Total, announced they are submitting the development plan for the second phase of the Johan Sverdrup offshore oil project to the Norwegian Ministry of Petroleum and Energy.
Located in North Sea, the Johan Sverdrup field is the largest field development on the Norwegian shelf since the 1980s. At plateau, the field is expected to produce up to 660,000 barrels per day, with a price of less than USD 20 per barrel and CO2 emissions of 0,67 kg per barrel, according to Eldar Sætre, Equinor CEO.
Today we are announcing an increased resource estimate and we are reducing the total estimated investment for both Phase 1 and Phase 2 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,
…explains Mr. Sætre.
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 1 and Phase 2 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 3400 man-years every year.
The Plan for development and operation (PDO) for Johan Sverdrup Phase 2 also includes measures to facilitate power from shore to the Utsira High by 2022, in accordance with the terms for PDO Phase 1. 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.
The first phase of the project is 80% complete, added Margareth Øvrum, Executive vice president for Technology, projects & drilling in Equinor. The updated investment estimate for Phase 1 is now NOK 86 billion (nominal NOK, project exchange rate), a reduction of 30%, amounting to NOK 37 billion since submission of the Phase 1 PDO.
Production start-up for the Phase 2 development is planned for Q4 2022.
In connection with the development of Phase 2, Equinor and the Johan Sverdrup partnership have established a full field digitalisation and technology plan to enhance safety and efficiency in operations, while reducing carbon emissions from the field. Some of the recovery technologies included in the plan are:
- 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
In the Phase 2 PDO, the resource estimate for the entire Johan Sverdrup field is raised from 2.1-3.1 billion barrels of oil equivalent to 2.2-3.2 billion barrels, with an expected estimate of 2.7 billion barrels.
We are now working to mature technology for automatic production optimisation, 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 visualise key parts of the field even before we start production for Phase 2 in 2022,
…concluded Ms. Øvrum.