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Statoil and Lundin at final stage decision on Norway Johan Sverdrup

Statoil and Lundin to award FEED on Johan Sverdrup

Statoil from Norway, Lundin Petroleum (Lundin) from Sweden, and their respective partners, Maersk Oil (Maersk) from Denmark, Det Norske from Norway, and Petoro from Norway, are reaching the final stage of decision to award the front end engineering and design (FEED) contract to develop the giant oil field Johan Sverdrup, on the Norwegian continental shelf (NCS).

As the largest discovery by far in Norway for decades, Johan Sverdrup is mobilizing the entire country to make sure that no drop of business will escape, in beginning with the FEED contract.

Statoil_Lundin_Johan_Sverdrup_mapHistorically, Johan Sverdrup was born from two separate licenses and discoveries from two different teams of joint venture.

On one side the Block PL501 is operated by Lundin while the Block PL 265 is led by Statoil.

In 2010, Lundin discovered Avaldsnes in the Block PL501 followed by Statoil hitting oil in the Block PL 265 with Aldous Major South and Aldous Major North wells in 2011.

Further exploration revealed to Lundin and Statoil that both discoveries were connected in a giant field covering more than 180 square kilometers in only 110 meters of water depth and 2,500 meters total depth within the NCS.

Statoil and Lundin to unitize Johan Sverdrup blocks

As a result, this giant crude oil field was renamed in 2012 after Johan Sverdrup across the both blocks.

But these blocks were owned and operated by different teams.

PL501 is operated by Lundin with working interests shared such as:

 Lundin 40% is the operator

 – Statoil 40%

 – Maersk 20%

PL265 is operated by Statoil with other stakeholders in the joint venture with:

 – Statoil 40% is the operator

 – Petoro 20%

 – Det Norske 20%

 – Lundin 10%

Despite this large spread of interests, StatoilLundin and their partners signed in March 2012 a unitization agreement to align operating responsibilities between the both blocks since they appeared to belong to the same field.

According to this agreement, Statoil is becoming the operator of the Johan Sverdrup project covering the both blocks while Lundin is due to take the operatorship of the production when in place.

Statoil_Lundin_Johan-Sverdrup_Phase-1Recently Lundin was reported to be selling its interests in Johan Sverdrup, this option is for now only for testing the market appetite to buy those shares and should not happen before the Plan for Development and Operation (PDO) should be approved.

Since then, Statoil, Lundin and their partners are working on this PDO where Johan Sverdrup is conceived as a stand-alone hub combining surface installation and subsea equipment.

If the scheme should be similar to other Statoil hubs in the Norwegian sea, the scale should be different.

By the addition of the Block PL501 and Block PL265, Johan Sverdrup is estimated to hold between 1.7 and 3.3 billion barrels of gross recoverable reserves of crude oil.

Statoil confirms Johan Sverdrup shore power supply

On this base, Aker Solutions carried out the conceptual study from which Statoil, Lundin and their partners are planning to develop Johan Sverdrup in three phases.

Considering that Statoil is willing to process the crude oil offshore, each phase should add a processing platform and export pipelines.

In this context, Johan Sverdrup first phase should include five platforms for:

Statoil_Johan-Sverdrug_Utsira-High_Electric_Hub_Scheme – Drilling

 – Risers and wellheads support

 – Central processing

 – Power

 – Living quarters

Statoil confirmed to power supply Johan Sverdrup from shore through the Utsira High electrical hub for transformation and distribution.

This electrical hub is intended to supply also Edward Gried (ex Luno), Ivar Aasen (ex Draupne) and Gina Krog (ex Dagny) with a 200 kilometers subsea DC link.

For the other packages, the Norwegian companies are in the lead.

The four platforms for drilling, risers, processing and living quarters will be tendered with dedicated FEED contracts.

For the execution phase of the project, the drilling platform and the living quarter platform will be tendered on conventional engineering, procurement and construction (EPC) contract while the riser and wellhead platform and the processing platform will be contracted under the form of engineering, procurement and management assistance (EPMA).

From the Johan Sverdrup hub of ptaforms, the associated gas should be exported through a subsea pipeline oversized for the current capacities, but to absorb expected expansions.

This export pipeline should be 165 kilometers long to be connected to the existing Statpipe trunkline close to Karmoy Island.

With 353 million cubic feet per day (cf/d) maximum volume, the gas should be treated at the Karsto Gas processing plant at the north of Stavanger

Assuming that Statoil, Lundin and their respective partners, Maersk, Det Norske, and Petoro will be able to award the FEED contracts on early 2014, the first oil should be pumped from Johan Sverdrup in 2019.

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