Equinor Says Production Has Started at Norway's Giant Johan Sverdrup Field
October 07 2019 - 3:39AM
Dow Jones News
By Dominic Chopping
Equinor ASA (EQNR.OS) and its partners on the Johan Sverdrup
field in the North Sea said over the weekend that production on the
giant field started on Saturday, more than two months ahead of
schedule and 40 billion Norwegian kroner ($4.4 billion) under
budget.
"Johan Sverdrup coming on stream is a momentous occasion... at
peak, this field will account for around one third of all oil
production in Norway," said Equinor Chief Executive Eldar Saetre.
"Johan Sverdrup is expected to generate income from production of
more than NOK1.4 trillion of which more than NOK900 billion to the
Norwegian state and society."
Johan Sverdrup has expected recoverable reserves of 2.7 billion
barrels of oil equivalent and the full field can produce up to
660,000 barrels of oil a day at peak.
The break-even price for the full-field development is less than
$20 a barrel. After reaching plateau for the first phase, initially
expected during the summer of 2020, expected operating costs are
below $2 a barrel. The operator also expects cash flow from
operations of around $50 a barrel in 2020, based on a real oil
price of $70 a barrel, partly as a result of the phasing of tax
payments in the ramp-up phase.
The plan for development and operation for Johan Sverdrup phase
1 had set a target for production start-up in late December 2019.
Since the PDO was approved in August 2015, investment costs for the
first phase of the development have been reduced by NOK40 billion
to now NOK83 billion.
The Johan Sverdrup partnership consist of Equinor as operator
and partners Lundin Petroleum AB (LUPE.SK), Petoro AS, Aker BP ASA
(AKERBP.OS) and Total SA (FP.FR).
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 07, 2019 03:24 ET (07:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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