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Statoil's Giant Sverdrup Field to Cost Less than Expected

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Reuters

OSLO, Feb 13 (Reuters) – Norway's Johan Sverdrup oilfield, the biggest North Sea find in decades, will produce more at its peak than earlier thought and initial development costs will be below forecasts, operator Statoil said on Thursday.

The field, a key plank in Norway's plans to revive oil production after a decade-long decline, will start up at the end of 2019 and the initial phase will also be bigger, producing more oil than analysts had anticipated.

"The update is very positive, implies reduced uncertainty," Teodor Sveen Nilsen at Swedbank wrote in a note to clients. "Indications for plateau production, recovery rate and capex are all better than we have assumed."

The field, a chance find in an area already considered almost fully explored, will produce between 550,000 and 650,000 barrels of oil equivalent per day (boe/d), compared with earlier guidance for above 500,000, Statoil said.

"Johan Sverdrup is among the largest oilfields on the Norwegian shelf, and will at peak contribute with 25 percent of the production from the Norwegian shelf," Statoil said.

It contains between 1.8 billion and 2.9 billion boe, in line with earlier estimates. Statoil said it aimed to recover 70 percent, about twice the global oil recovery rate.

The first phase of development will cost between 100 billion and 120 billion crowns ($16.4 billion to $19.7 billion), below Det norske's guidance and under analysts' estimate for $22 billion, with production initially seen at 315,000 to 380,000 boe/d.


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