Statoil signs letters of intent for Johan Sverdrup phase 2 with Aibel and Aker Solutions-Kværner joint venture

April 5, 2018 07:34 CEST | Last modified April 5, 2018 07:48 CEST
Johan Sverdrup illustration

Today Statoil, on behalf of the Johan Sverdrup partnership, signs a letter of intent with Aibel for the construction of the processing platform topside for phase 2 of the project. A letter of intent for field centre modifications is also issued to a joint venture of Aker Solutions and Kværner. Total value is estimated at more than NOK 11 billion.

Phase 1 of the Johan Sverdrup development is well underway with planned startup in late 2019. To promote synergies, continuity and a holistic development of the entire field the Johan Sverdrup partnership is issuing letters of intent for the development of phase 2 of the project. The contracts will be awarded later this year. Production start for phase 2 is planned in 2022.

«Good and close collaboration with our suppliers has been an important factor behind the improvements that we have seen so far in phase 1 of the Johan Sverdrup development. Signing these two agreements involving three of our main suppliers from phase 1 expresses our desire to build on the experiences, collaboration and skill-sets developed into the second phase of the project. This should give us a good starting point to deliver Johan Sverdrup phase 2 safely, with quality and on budget», says Kjetel Digre, senior vice president for Johan Sverdrup in Statoil.

The contract to be awarded to Aibel includes engineering, procurement and construction (EPC) of the topside for the second Johan Sverdrup processing platform (P2) which will extend production capacity on the field from 440,000 to 660,000 barrels of oil per day after startup in 2022. The value of the contract is approximately NOK 8 billion.

The contract to be awarded to the Aker Solutions-Kværner joint venture includes engineering, procurement and construction of a utility module for the riser platform, field centre modifications, and installation and hook-up activities related to the phase 2 development. Contract value is estimated at NOK 3.4 billion.

An area-wide solution by 2022 for power from shore to the Utsira High area, is an integrated part of the phase 2 development where another power converter will be installed on the new processing platform.

Portrait of Kjetel Digre
Kjetel Digre, senior vice president for Johan Sverdrup in Statoil
Portrait - Margareth Øvrum
Margareth Øvrum, executive vice president for Technology, projects and drilling in Statoil

Considerable socioeconomic benefits
To date the Johan Sverdrup development has led to contracts worth more than NOK 60 billion. Of this, more than 70% have been awarded to suppliers in Norway.

The two phase 2 contracts will lead to increased activity at several yards along the Norwegian coast – particularly in Haugesund, Egersund and Stord. Engineering activity will take place in Asker (Aibel) and Stavanger (Aker Solutions). At its peak, the Johan Sverdrup phase 2 development will directly employ more than 3000 people in Norway.

«Johan Sverdrup will create significant value for its owners and society for more than 50 years. And I am pleased to see that Norwegian suppliers are continuing to be competitive in an international market, enabling them to participate in the next stage of the Johan Sverdrup project,» says Margareth Øvrum, executive vice president for Technology, projects and drilling in Statoil.

The contracts are subject to Norwegian government approval of the plan for development and operation for Johan Sverdrup phase 2 due to be submitted in the second half of 2018.

The media is invited to a press conference at Statoil’s offices at Fornebu at 10.00 am. Please meet in Statoil’s reception by 09.40 at the latest.

To participate in the press conference please contact Eskil Eriksen, eseri@statoil.com, +4795882534

Statoil will be represented by: Margareth Øvrum, EVP for Technology, projects & drilling Kjetel Rokseth Digre, SVP Johan Sverdrup Pål Eitrheim, SVP Procurement Trond Stokka Meling, VP Johan Sverdrup Phase 2.

Suppliers will be represented by: Mads Andersen, CEO Aibel, Nils Arne Hatleskog, EVP Aibel, Luis Araujo, CEO Aker Solutions, Knut Sandvik, EVP Aker Solutions, Idar Eikrem, interim CEO Kværner, and Elly Bjerknes, EVP Kværner.

FACTS ABOUT JOHAN SVERDRUP

Phase 1

  • Includes the development of four platforms (utility- and living quarters, processing platform, drilling platform, riser platform), three subsea installations for water injection, power from shore, export pipeline for oil (Mongstad) and gas (Kårstø)
  • Under development. Approx. 70 % of the development is completed
  • More than NOK 60 billion worth of contracts awarded. More than 70 % of the suppliers with a Norwegian billing address
  • CAPEX estimate: NOK 88 billion
  • Break-even Phase 1: Below USD 15 per barrel
  • Production start: late 2019

Phase 2

  • Includes development of another processing platform for the field centre + the Avaldsnes, Kvitsøy and Geitungen satellite areas, in addition to power from shore to the Utsira High by 2022
  • Investment decision (DG3) and submission of the plan for development and operation: Second half of 2018
  • Investment estimate: Below NOK 45 billion
  • Production start: 2022

Full field (Phase 1 + Phase 2)

  • Includes both Phase 1 and Phase 2 of the Johan Sverdrup development
  • Resource estimate: 2.1 – 3.1 billion barrels of oil equivalent
  • Break-even price: below USD 20 per barrel
  • PARTNERS: Statoil: 40,0267 % (operator), Lundin Norway: 22,6 %, Petoro: 17,36 %, AkerBP: 11,5733 % og Maersk Oil: 8,44 %.

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