Page 10 - Euroil Week 13 2020

EurOil PROJECTS & COMPANIES EurOil
Sverdrup to produce more and sooner
NORWAY
Sverdrup’s first-phase production plateau
will be reached sooner and will be higher than previously thought.
THE giant Johan Sverdrup oilfield in the North Sea is due to reach to its full first-phase capac- ity earlier than anticipated, its operator Equinor reported on March 30.
The faster ramp-up comes at a time when Russia, Saudi Arabia and other OPEC+ produc- ers are preparing to flood the global oil market following the expiry of their output pact. Sver- drup, in part thanks to its sheer size, needs less than $20 per barrel oil to break even, according to Equinor, making it well-suited for the current downturn.
The first stage of Sverdrup’s development was launched last autumn and had been scheduled to reach a plateau production rate of 440,000 bar- rels per day in the summer. The field is already flowing more than 430,000 bpd, Equinor said, and will hit its maximum capacity in early May instead. This capacity will also be 470,000 bpd instead of the expected 440,000 bpd, according to the Norwegian firm, thanks to an increase in its plant capacity.
“Field production has been very good and stable from day one, and the wells have produced even better than expected,” Sverdrup’s vice-presi- dent of operations, Rune Nedregaard, said.
“Johan Sverdrup has very low production costs, contributing with a strong cashflow also in periods with low prices, as we [are experienc- ing],” he added.
Sverdrup’s second phase is also anticipated to produce at a higher rate of 690,000 bpd, Equinor said, rather than the 660,000 bpd target set last
year. The phase is due to come on stream in the fourth quarter of 2022.
Equinor operates Sverdrup’s with a 42.6% stake, while Sweden’s Lundin Petroleum has 20%, Norwegian players Petoro and Aker BP hold 17.4% and 11.6% respectively, and France’s Total has 8.4%. Confirming the change in sched- ule and volumes, Lundin said separately that it would adjust its 2020 production guidance accordingly.
Further adding to North Sea supply this year, UK operator Ineos reported last week that it had delayed the planned shutdown of the 600,000 bpd Forties pipeline system because of concerns about bringing workers together as the coronavi- rus (COVID-19) pandemic continues to spread. The system, which handles around 40% of UK liquids production, had been due to go offline on June 16 for major maintenance, but this is no longer expected until August at the earliest.
In light of Ineos’ decision, Norwegian con- sultancy Rystad Energy has raised its forecast for North Sea oil production by 330,000 bpd to 2.96mn bpd for June and by 190,000 bpd to 3.04mn bpd for July.
“This just adds another ripple to the growing oversupply pool of global liquids – an overhang for Q2 2020 that is already so incomprehensibly massive that it will eventually force shut-ins as oil prices fall below short-run marginal costs and logistical challenges arise,” Rystad analyst Milan Rudel commented. ™
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w w w . N E W S B A S E . c o m Week 13 02•April•2020