PERSPECTIVE 2014
Petoro - en drivkraft på norsk sokkel

Petoro ONS MAGAZINE 2014
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Artist’s impression: Statoil

Johan Sverdrup has historic dimensions

Revitalising the industry

Development of the giant North Sea field on the Utsira High will revitalise the industry, affirms Øivind Reinertsen, senior vice president for Johan Sverdrup at Statoil. “It’s a long time since we could count barrels in the billions,” he says in a conversation with his Petoro opposite number, Jan Terje Mathisen.
gron strek
Reinertsen believes that this discovery will prove to have historic significance both for Norwegian society and for Norway’s petroleum industry.

“We’ve made a substantial find at a time when people had begun to talk about sunset on the Norwegian continental shelf [NCS],” he says. Joining Statoil in 1977, he has played a key role in Norway’s oil adventure.

“By and large, only small oil discoveries had been made since the 1970s and 1980s, and there was a lot of talk about tail-end production and mature fields.

“This is big, positive news. It’s already had and will continue to have a huge impact on the way young people view the industry, and it’ll attract new recruits.”

Mathisen adds: “It creates new perspectives for both society and the players. We’re talking about production in a 50-year perspective. Our children and grandchildren will be working with this field.”
 
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Johan Sverdrup vice presidents: Statoil’s Øyvind Reinertsen (right) and Petoro’s Jan Terje Mathisen are looking forward to new opportunities.  Photo: Kjell Jørgen Holbye

 
To put Johan Sverdrup in perspective, it ranked in 2011 – when the Avaldsnes and Aldous discoveries were confirmed to be a single field – as the world’s biggest offshore strike at that time.

It will account at peak output for about 25 per cent of oil production from the NCS, and is expected to remain on stream until 2070 – at least.

This may turn out to be Norway’s second-largest oil field after Ekofisk, and is quite definitely among the four-five biggest found on the NCS.

“Johan Sverdrup’s reserves are actually on a par with the overall remaining resources in the Gullfaks, Heidrun, Oseberg, Snorre and Åsgard fields,” says Mathisen.

No less than NOK 100-120 billion will be invested in its first development stage alone. Not only is it a giant, but its oil is also very accessible and its production properties are very good.

“New discoveries of this size in recent decades have generally been made in inaccessible areas, under thick salt layers in the Arctic or in very deep waters,” says Reinertsen.

“But Johan Sverdrup doesn’t involve such difficult oil. It lies in shallow waters, in a known area and close to the coast, and has very simple underground conditions. We’re back to basics.”

He notes that the second well drilled on the NCS in 1966 lay in the same area, and another well sunk in 1976 a few hundred metres east of the Sverdrup discovery, encountered only water. The bull’s-eye was not hit until 2010-11.

“This goes to show that he who seeks, finds,” adds Mathisen. He and Reinertsen agree that the Utsira High undoubtedly contains more oil, but that finding further fields of Johan Sverdrup’s size will be a tall order.
“We’re talking about production in a 50-year perspective. Our children and grandchildren will be working with this field.”
Jan Terje Mathisen
Mathisen reports that the discovery has been an inspiration for Petoro, an organisation with long and heavyweight experience of mature fields.

“We see that everyone’s been motivated by the opportunity to participate in a project of this size and duration, and we’re also attracting new people. We’re helping to define the future.”

Reinertsen agrees. “This is the biggest industrial adventure in Norway for a long time. I don’t think we’ll really comprehend its size before we retire and read about it in the press.”

AGREEMENT
A pre-unit agreement was signed on 23 March 2012 between the partners in the various licences involved (see box), with Statoil chosen as operator for this initial phase.

That means the company will lead the work until the unitised partnership submits its plan for development and operation (PDO) to the government in early 2015.

At that point, the unitised field will become a single legal entity. Until then, all issues must be voted on and secure a majority in each of the licences.

Reinertsen takes the opportunity to praise the other partners. “All decisions taken so far have been unanimous. Achieving that is a little out of the ordinary.”

Matters on which agreement have been reached include the choice of a field centre. Solutions have also been picked for oil exports and power from shore.

The centre will comprise platforms for processing, risers, wellheads and quarters, with berths for 450 people. Three subsea templates are also included.

Mathisen emphasises that thinking operating costs right from the start has been important. “Keeping production expenditure down will be crucial for the field’s long-term profitability.

“With an operating horizon of 50 years, a field centre provides a good overview, and four platforms linked by bridges will yield synergies.”
FLEXIBILITY
The prospect of a long producing life is also the reason why Petoro has pushed actively to build flexibility into the technical solutions.

That means incorporating extra space and expansion capacity into the platforms in order to meet future modification requirements.

“We’re seeking robustness combined with flexibility,” explains Mathisen, who has had a unanimous licence behind him in these efforts.

“Petoro’s very familiar with the challenges of mature fields, where space is often quite simply at a premium. We know how hard it is to create value in the mature phase if you’re not prepared.”

The political debate in Norway about power from shore for the field has not been allowed to disrupt planning work by the teams of engineers and other specialists involved.

But everyone – including the whole Storting (parliament) – has also been fully aware of the need to ensure that the project keeps moving forward.

“Progress is lost if you start to speculate,” says Reinertsen, whose eye is on a start to production from Johan Sverdrup in late 2019.

“But the power issue has clearly occupied substantial management capacity. We’ve achieved unanimity in the partnership on the decision to develop phase one with power from shore.

“This solution will also be incorporated in planning the next development stage and for other fields on the Utsira High. The most important consideration is to stick to the schedule.”
“I don’t think we’ll really comprehend the size of this industry adventure before we retire and read about it in the press.”
Øivind Reinertsen
0090780 - johan sverdrup - photo statoil - statoil
Artist’s impression: Statoil
Johan Sverdrup in brief
  • Oil and gas field on the Utsira High in the North Sea, 140 km west of Stavanger
  • An “elephant” (giant) field
  • Spans production licences 265, 501 and 502
  • Partners in PL 501: Lundin Norway 40%, Statoil 40%, Maersk Oil 20%
  • Partners in PL 265: Statoil 40%, Petoro 30%, Det Norske Oljeselskap 20%, Lundin Norway 10%
  • Partners in PL 502: Statoil 44.44%, Petoro 33.33% Det Norske Oljeselskap 22.22%
  • Could be the second largest field on the NCS after Ekofisk, with 1 800-2 900 million barrels of oil equivalent (boe)
  • Will account at peak for 25 per cent of NCS oil output – 315 000-380 000 boe per day in phase one, 550 000-650 000 boe/d in full production
  • Production horizon 50 years
  • Statoil is the pre-unit operator
  • PDO due to be submitted in early 2015
  • Production planned to start in late 2019
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