Work for generations

04.05.2015
The Johan Sverdrup field played hide-and-seek for 40 years with some of the world’s leading oil prospectors before its discovery in 2010. Prospects for the NCS would have been significantly gloomier without it.
  • Bjørn Vidar Lerøen

Johan Sverdrup, Illustration: Statoil

Johan Sverdrup, Norway’s new giant North Sea oil field, is expected to produce for about seven decades. The goal is a recovery factor of no less than 70 per cent of reserves in place.
(Illustration: Statoil)

 

Norway’s new North Sea giant is now under development, with dimensions in the same mega-class as the Ekofisk, Statfjord and Troll fields. The Norwegian oil sector has not been able to use such big words and numbers for a long time.

   “Without Sverdrup, the NCS would be in a poor way,” confirms Arne Sigve Nylund, the executive vice president responsible for operations off Norway at Statoil.

   This field is indeed the big bright spot in an otherwise difficult time for the petroleum sector. Oil circles worldwide were astonished at the news of the big strike on the Utsira High.

   The small Lundin Norway company drilled the 16/2-6 discovery well in the autumn of 2010, while Statoil followed up with another well in the neighbouring licence the year after.

   This established that the find was even bigger than first thought, ranking as the largest discovery that year in a world which still needs more energy and depends on oil and gas.

   Oil explorers first reached this part of the Norwegian North Sea in the early 1970s, and drilled fairly close to Johan Sverdrup. But it still took four decades to locate it.

   The field extends over three licences, and was originally given two names – Avaldnes and Aldous Major South. But Ola Borten Moe, the Centre Party politician who was petroleum minister at the time, wanted something more Norwegian.

   He amended the practice for naming fields on the NCS. Johan Sverdrup was a noted 19th-century Liberal politician and prime minister, and the father of parliamentary government in Norway.

   “All power will be concentrated in this chamber,” was his most famous declaration. And all oil in the field named after him has come to be concentrated in a unitised development.

   But negotiating the division of this wealth in order to achieve such a coordinated approach proved less than easy, with a lengthy discussion on percentage shares.

   Statoil and its partners opted to submit the plan for development and operation (PDO) to the Ministry of Petroleum and Energy on Friday 13 February this year. Petroleum minister Tord Lien called it “a historic day for Norway.”

   Former premier Sverdrup’s descendants in the Liberal party have stipulated two significant requirements for whichever government presents the development plan.

   These are that installations on the Utsira High must be run with power from shore, and that the oil industry must not be allowed beyond the marginal ice zone in the far north.

   Where Johan Sverdrup is concerned, Liberal pressure has been successful. Phase one of the field development will be powered by electricity from land.

   The history of this discovery will extend far into the future. But it must first be brought into production, and work on that is now in full swing.

   “This will be a massive project, but we have the reservoir on our side,” says Nylund. “I’d characterise it as a friendly formation, with fantastic production properties.”

   He says Johan Sverdrup will be much easier to deal with than Gullfaks, for example. And he is well placed to make that judgement, having served as a platform manager on the latter.

   Nylund has also been in charge of Statfjord, and cites it to illustrates the dimensions faced on the NCS – recoverable oil resources on this field have been upgraded by 1.7 billion barrels since coming on stream in 1979.

   That is close to the lower estimate for recovery from Johan Sverdrup, which is expected to yield 1.8-2.9 billion barrels of oil equivalent – 95 per cent of it oil.

   But Nylund emphasises that a number of other new discoveries are required to offset the decline in production from Norway’s old offshore fields.

   Johan Sverdrup nevertheless represents a welcome addition to Norwegian oil output, which has been falling for the past 15 years.

   More recently, too, oil prices have slumped, production costs have exploded and opposition to the industry’s activities has risen among Norwegians.

   Almost 50 years after the NCS was opened to oil exploration in 1965, Nylund observed in a speech that that the workers who will shut down Johan Sverdrup have yet to be born.

   When it comes on stream in 2019, at a cost of NOK 117 billion for stage one, the field is likely to remain in production for 70 years.

   A phased development is essential given that the reservoir covers roughly 200 square kilometres and will call for several installations linked by a kilometre of bridges.

   The first phase of Johan Sverdrup alone is expected to yield a daily output exceeding 300 000 barrels of oil daily, and this level of production will later be more than doubled.

   Oil output is due to be transported north-eastwards for 274 kilometres through a 36-inch pipeline to the Mongstad complex north of Bergen.

   Associated gas, which accounts for about five per cent of the field’s reserves, will be piped for 156 kilometres through an 19-inch line to the Kårstø processing plant north of Stavanger.

   Johan Sverdrup will thereby also help to strengthen the operational basis for Norway’s most important oil and gas facilities on land, at Mongstad and Kårstø respectively.

   The employment effect of the field will be substantial, with development alone demanding 50 000 work-years. An average operating year will require 2 700 work-years, with operator Statoil estimating that this figure could reach 3 400 at plateau.

   When the first production well is opened in late 2009, the field will start building up until it accounts for 25 per cent of Norway’s entire oil stream – as matters stand today.