Statoil reported on August 29, 2016, that the biggest Norwegian offshore oil project in decades is going to be cheaper and more productive.
The cut in costs and increase in production «have been achieved by higher drilling and well efficiency and high quality in project planning and execution,» said the company.
The state-controlled oil and gas producer said it has reduced spending in the field’s first phase to 99 billion Norwegian kroner ($11.96 billion) from the previously targeted 123 billion kroner.
Importantly in these times of falling prices Statoil said the break-even price for the whole project is now below $30 a barrel – and $25 for the first phase.
«We are now seeing the results of good cooperation between Statoil, its partners and suppliers. We are strongly reducing investment costs, and we are increasing the process capacity, resource estimate and value of the field», said Statoil´s CEO Eldar Saetre.
The field’s production capacity will be 440,000 barrels a day in the first phase, compared with a previous estimate of 315,000 to 380,000 barrels a day, Statoil said.
The North Sea field, discovered in 2010, is estimated to hold between 1.9 billion and 3 billion barrels of oil equivalent.
According to an analysis by the Norwegian Petroleum Directorate (NPD), development costs on the Norwegian shelf have declined by an average of more than 40% as a result of simpler development concepts, more efficient drilling and lower prices for work and equipment.
The Johan Sverdrup field is one of the 5 biggest on the Norwegian Continental Shelf with expected resources of up to three billion barrels of oil equivalent.
It is expected to be one of the most important industrial projects in Norway over the next 50 years.
Statoil is the operator of the field with a stake of slightly more than 40%. Sweden's Lundin holds 22.6%, Norway's state-owned Petoro 17.36%, Norwegian firm Det norske 11.57% and Denmark's Maersk 8.44%.