Statiol’s Johan Sverdrup development could be profitable at a break-even price of $25, the company has revealed.
The Norwegian operator said the first phase of the project is currently estimated at NOK99billion, a reduction of NOK24billion since a plan for the development and operation was submitted.
The company’s chief executive Eldar Saetre said the firm was now seeing the results of cooperation between it and its partners and suppliers.
He said Statoil was “strongly reducing costs” as well as increasing “process capacity, resource estimate and value of the field.”
Statoil said improvement for phase one of the development had been achieved by higher drilling and well efficiency and high quality in project planning and execution.
The Johan Sverdrup project will be developed in several phases, and a comprehensive effort has been made to develop the concept for full-field development of Johan Sverdrup. The estimate for the full-field investment has been improved from a range of NOK170–220 billion in 2015 to NOK140–170 billion this year.
Margareth Øvrum, executive vice president,Technology, Projects & Drilling said: “We will continue our improvement effort, and Statoil and its partners have decided to spend more time on this work until project pre-sanction and a final investment decision has been reached for future phases. At the same time we want to stay on schedule for full-field production start and for establishing an area solution for land-based power by 2022, as per conditions stated in the approved PDO for phase one.”
Statoil said it has also focused on removing bottlenecks in the facilities to expand processing capacity on the Johan Sverdrup field centre.
The work on optimising the processing facility for phase one has been successful and phase one production capacity is currently estimated at 440,000 barrels of oil per day.
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