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Equinor has raised the resource estimate for its giant oil field Johan Sverdrup in the North Sea and said it was able to drive development costs for the project further down.
The resource estimate for the entire Johan Sverdrup field—one of the largest discoveries in the North Sea in the past three decades and one of the five largest oil fields on the Norwegian Continental Shelf—is raised to 2.2-3.2 billion barrels of oil equivalent from 2.1-3.1 billion barrels of oil equivalent, Equinor said on Monday, announcing it is submitting the development plan for the second phase of the project to the Norwegian Ministry of Petroleum and Energy.
The first phase of the giant Johan Sverdrup project is slated to start production in November 2019 and will be the main contributor to Norway’s rising oil production until 2023.
“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 barrels per day, with a break-even price of less than USD 20 per barrel and very low CO2 emissions of 0,67 kg per barrel,” Equinor CEO Eldar Sætre said in the company’s press release.
Equinor has cut the total estimated investment for both Phase 1 and Phase 2 of Johan Sverdrup’s development by an additional US$719 million (6 billion Norwegian crowns) since February this year, Sætre said. Since the plan for the first phase was submitted in 2015, the company has cut total estimated costs for Johan Sverdrup’s full development by more than US$9.6 billion (80 billion crowns), the manager added.
The updated investment estimate for Phase 1 is now US$10.3 billion (86 billion crowns), down by 30 percent since the development plan was first submitted.
In the Phase 2 plan, Equinor reduced the investment estimate to US$4.9 billion (41 billion crowns), and the break-even price for Phase 2 is now less than $25 per barrel, says Margareth Øvrum, Executive vice president for Technology, projects & drilling at Equinor.
The second phase of Johan Sverdrup is expected to start production in the fourth quarter of 2022.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.