EurOil: Sverdrup oil output to drop from peak early next year

Norway’s largest source of oil production, the Johan Sverdrup field, is expected to drop from its production peak early next year, operator Equinor announced on October 24.

The field set a record in daily production, exceeding 756,000 barrels per day (bpd) in September – equivalent to approximately 6-7% of Europe’s daily oil demand, according to Equinor.

"We anticipate Johan Sverdrup will leave its plateau production phase in early 2025," Equinor CEO Anders Opedal said during a press briefing.

Sverdrup was launched in October 2019 and has provided Equinor and its other developers with a welcome boost of low-cost production during the downturn. It was originally expected to produce 440,000 bpd of crude under its first phase of development. But Equinor later raised the target to 470,000 bpd, then 500,000 bpd and then 535,000 bpd, as wells performed better than anticipated. The second phase raised production to above 700,000 bpd.

The field has produced 1bn barrels to date. Initially, it was estimated to contain reserves of 2.7bn barrels of oil equivalent (boe), including associated gas.

Equinor holds a 42.6% operating stake in Sverdrup, with Aker BP owning 31.6%, state-owned Petoro 17.4% and TotalEnergies 8.4%.

Sverdrup’s investment cost came in at around $14bn. Equinor and its partners were able to take advantage of the 2014-2017 market downturn to cut costs for equipment and services. The field is well-suited to weak oil prices, boasting an operating cost of below $2 per barrel and a break-even cost of less than $20 per barrel. Equinor has also stressed the project’s green credentials. It estimates that each barrel from the field emits under 0.2 kg of CO2, which is almost 100 times lower than the global average. This is largely because Sverdrup is powered from the shore.

Equinor’s adjusted earnings before tax for the third quarter dropped to $6.89bn, down from $7.93bn the previous year, and below the $7.08bn predicted by analysts. The company reported oil production of 1.98mn barrels of oil equivalent per day, in line with expectations but slightly down from 2.01mn boepd a year ago.

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