Equinor has started its Johan Sverdrup oilfield, a rare mega-project in the North Sea that’s been a boon for Norway’s offshore industry and now promises to deliver a huge production boost for the country.
Discovered in 2010 in an area that had been disregarded by most explorers, the site started production on Saturday and is set to reach 440,000 barrels a day by next summer. That represents a 33 per cent addition to Norway’s production in the first half of this year, a spike in output not seen since the 1980s.
It’s hard to overstate the importance of Sverdrup for its owners, the Norwegian state and the country’s entire oil industry.
Confidence about the field’s start-up was key for state-controlled Equinor’s decision to kick off a long-awaited $5 billion (Dh18.36bn) buyback programme in September, and Sverdrup will be a driving force in the company’s production growth in the next years. It also helped to transform Lundin Petroleum — which made the initial discovery — and Aker BP into two of the most important companies in Norway’s oil industry.
“Sverdrup coming on stream is a momentous occasion for Equinor, our partners and suppliers,” the state-controlled company’s chief executive Eldar Saetre said in a statement on Saturday. “At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions.”
With as much as 3.2 billion barrels in reserves, Sverdup is Norway’s biggest discovery since the 1970s.
Equinor expects the field to contribute about $100bn to Norway’s state coffers over 50 years. The field’s timing was also perfect for the Nordic country – approved in 2015, just after a historic collapse in the crude market, it offered a lifeline for the embattled oil-service industry.
“It rescued us” from a “mega-crisis,” former Petroleum and Energy Minister Terje Soviknes said last year.
Sverdrup was originally scheduled to start production in December this year, but Equinor advanced the date to October. The field will reach maximum output of 660,000 barrels a day in its second phase in 2023.
The field will be powered from land, reducing emissions of climate gases by as much as 90 per cent. Emissions of 0.67 kilos of carbon dioxide per barrel in the production phase are among the lowest in the world and compare to averages of about 9kg in Norway and 18kg globally, according to Equinor.