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Oil from the giant Johan Sverdrup field in the North Sea—due to start production in late 2019—is a prime candidate for a future addition to the Brent basket of crude oils to increase the liquidity of the global oil benchmark, Jonty Rushforth, Senior Director, Energy Price Group, S&P Global Platts, said at a conference on Monday.
Dated Brent—the physical cargoes of crude oil loading in the North Sea on any given day and with specific delivery dates—is the core component of the Brent complex. When production from the namesake Brent field declined, Platts added Forties and Oseberg in 2002 and Ekofisk in 2007 to the price assessment to compensate for production declines and to ensure liquidity of the benchmark.
As of January this year, the Brent benchmark also includes oil from the Troll oilfield offshore Norway.
At the time when it announced the inclusion of Troll in the Brent basket in February last year, S&P Global Platts said that it was preparing for an expected decline in North Sea oil production and that “Platts believes it is time to add another grade to the basket to ensure there is sufficient deliverable crude reflected in the price assessments.”
Now Platts’ Rushforth said at a conference:
“We think Johan Sverdrup is a prime candidate for addition to the North Sea basket.”
“Looking forward it is very difficult to see any other grades beyond Sverdrup that really are suitable for the benchmark on an FOB basis,” Rushforth said, as carried by Reuters.
Johan Sverdrup, operated by Norway’s Statoil, is one of the five biggest oil fields on the Norwegian continental shelf. Statoil expects Sverdrup’s recoverable resources to be between 2.1 billion and 3.1 billion barrels of oil equivalent. Phase 1 of the oil field is expected to start up at the end of 2019 with production capacity estimated at 440,000 bpd. With phase 2, which is expected to start up in 2022, Sverdrup’s full-field production is estimated at 660,000 bpd, with peak production equal to 25 percent of Norway’s total oil production.
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.