Plan for Development and Operation for Johan Sverdrup
Monday 16 February 2015
Lundin Petroleum is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) together with its partners Statoil (operator), Maersk Oil, Det norske oljeselskap and Petoro, will today submit a plan for development and operation (PDO) for Phase 1 of the Johan Sverdrup field to the Norwegian Ministry of Petroleum and Energy.
The full field gross recoverable contingent resources range for Johan Sverdrup is estimated at between 1.7 – 3.0 billion barrels of oil equivalent with approximately 95 percent being oil. The gross oil and gas production capacity for the full field is expected to be in the range of 550,000 – 650,000 barrels of oil equivalent per day.
The Johan Sverdrup field will be developed in several phases and with multiple fixed platform installations. Phase 1 of the development consists of four bridge linked platforms as well as three subsea installations. The gross capital expenditures for Phase 1 is estimated at NOK 117 billion which includes oil and gas export pipelines, development wells as well as power supply from shore. Phase 1 is scheduled to start production in late 2019 with a forecast gross production level of between 315,000 and 380,000 barrels of oil per day.
The 22 appraisal wells which have been drilled on Johan Sverdrup have shown that the reservoir is of exceptional quality and the multiple production tests carried out also indicate that the well productivity will be very high. Consequently the ramp-up periods to plateau production both for Phase 1 and for the subsequent phases will be very short. Phase 2 of the Johan Sverdrup development is expected to commence production in 2022. Whilst the development concept for the full field development has not yet been approved by the partnership, the current estimated full field capital costs, including Phase 1 costs, are in the range of NOK 170 to NOK 220 billion.
The estimated annual operating costs for Johan Sverdrup for Phase 1 are estimated at NOK 3.8 billion which translates into an operating cost of less than USD 5 per barrel when Phase 1 is producing at plateau. The Johan Sverdrup field was discovered in 2010 with the discovery of Avaldsnes, PL501, by Lundin Norway, followed by the discovery of Aldous, PL265, by Statoil in 2011.
The majority of the partnership has asked the Ministry of Petroleum and Energy to determine the final allocation of resources in Johan Sverdrup, based on the following proposal: Statoil 40.0267 percent, Lundin Norway 22.12 percent, Petoro 17.84 percent, Det norske oljeselskap 11.8933 percent and Maersk Oil 8.12 percent.
Ashley Heppenstall, President and CEO of Lundin Petroleum comments: "The submission of the Plan for Development for Phase 1 of Johan Sverdrup is a major milestone for Lundin Petroleum, our partners and for the Norwegian offshore industry. Johan Sverdrup is one of the largest fields ever developed in the North Sea and has in addition excellent reservoir characteristics. I am convinced that this field will outperform current forecasts in respect of recoverable resources and productivity and will generate major value to our shareholders for many years to come."