Johan Sverdrup Oil Field

COMPANY PROFILE

2015

JOHAN SVERDRUP

www.statoil.com

Generating gigantic value Editorial: Harriet Pattison © Statoil

With production start-up scheduled for late 2019, the first phase of the Johan Sverdrup field development project, located 155km west of Stavanger, Norway, is currently underway. Standing as one of the most significant oil fields to date, it will provide energy – up to three billion barrels of oil equivalents – over the next 50 years.

From mountaineer to lawyer to Prime Minister, Johan Sverdrup was the very first Prime Minister of Norway following the introduction of parliamentarism. Considered the ‘father of Norwegian parliamentarism’, Sverdrup held the post from 1884 to 1889, with his subsequent death just three years later in February, 1892.

A liberal candidate, Sverdrup initially worked as a lawyer in Larvik,

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a small town located on the west coast of Oslofjord, before his first election to the Storting in 1851.

Often regarded as a controversial leader, his influence on Norwegian politics was undeniable, lasting far beyond his ministerial role.

JOHAN SVERDRUP First discovered by Sweden-based company, Lundin Petroleum, alongside Statoil in 2010, the Johan

Sverdrup field is located 155km west of Stavanger, on the Utsira High in the North Sea. Laying in two separate production licenses, the field was effectively two different discoveries – Avaldsnes (operated

by Lundin petroleum) and Aldous Major South (operated by Statoil) – however, after it was revealed that both discoveries would constitute one field, it was re-named Johan Sverdrup and in March 2012, Statoil

JOHAN SVERDRUP was appointed working operator following a signing of the pre-unit agreement between both licensees.

The majority of the Johan Sverdrup partners have asked the Norwegian Ministry of Petroleum and Energy to determine the final allocation of resources in Johan Sverdrup, based on the following proposal: Statoil 40.0267%, Lundin Norway 22.12%, Petoro 17.84%, Det norske oljeselskap 11.8933% and Maersk Oil 8.12%.

“The partnership has submitted a very good basis for further proceedings to the ministry,” explained Øivind Reinertsen, Senior Vice President for the Johan Sverdrup project.

“The Johan Sverdrup development will create ripple effects for the whole society. We look forward to a continued good cooperation with our partners, the authorities and with a competent and competitive supply industry.

The field will need the contribution of many suppliers, like a complex

jigsaw puzzle where all pieces must be in place before we cross the finish line. We are excited about getting started,” Reinertsen added.

THE BLUEPRINT Standing as the biggest industrial project in Norway for decades past and no doubt the foreseeable future, the Johan Sverdrup field is to be developed in phases.

Daily field production during the first phase is expected to reach 315,000 barrels of oil equivalents, developing up to 2.4 billion boe.

Investments for Phase 1 alone, are estimated at US$15.4 billion (NOK 117 billion - 2015 value).

Phase 1 of the Johan Sverdrup field development is set to generate some 51,000 man-years alone – of which 22,000 man-years are expected to be delivered by suppliers with 12,000 of these by their respective sub-suppliers. It will consist of four installations, including a utility and living quarters platform, a processing platform, a drilling

platform and a riser platform, as well as three subsea water injection templates - the platforms will be interlinked by gangways.

The front-end engineering and design work of the four-platform field hub has been awarded to Aker Solutions, who were given the contract for the detailed engineering phase in January 2015. The platform jacket work has been awarded to Kværner.

Power to Johan Sverdrup during Phase 1 will be supplied from shore - helping to reduce total CO2 emissions from the Utsira High area by 60-70% - a transformer on Kårstø will deliver direct current to the riser platform, ensuring an estimated 80 MW. Gassco has been awarded operator for the gas transport system from the field when it becomes operational. Running from the field’s riser platform, the 18-inch pipeline will be tied into the Statpipe rich gas system on the seabed, which lies west of Karmøy, allowing

© Øyvind Hagen | Statoil

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© Statoil ASA

its gas to flow to the Kårstø process plant north of Stavanger.

Playing a vital role in the transport and treatment of gas and condensate (light oil) from important areas located on the Norwegian Continental Shelf (NCS), the Kårstø processing plant currently stands as the largest of its type in Europe.

In February, the plan for development and operation (PDO) for the Norwegian field was submitted to Tord Lien, at the Norwegian Ministry of Petroleum and Energy from Statoil CEO, Eldar Sætre.

“This is a great day,” explained Sætre. “We are delivering the PDO for the largest oil discovery on the Norwegian continental shelf since

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the 1980s. Johan Sverdrup will generate value of great importance to Norway through several decades.

The field’s economy is robust also at current oil prices.”

PHASE 1 COMMENCES In June earlier this year, the first building blocks of Phase 1 got underway as the machine scheduled to cut the steel for the riser platform jacket was started up.

“This is a special day,” Kjetel Digre, Senior Vice President for the Johan Sverdrup development project, said in a statement. “We’ve been working thoroughly for a long time making the preparations for this exciting and complex project. It feels great now that we’ve started

construction on one of the biggest industrial projects in Europe.”

The steel jacket for the riser platform is currently being built at Kværner Verdal, weighing in at 26,500-tons, it will stand as the biggest steel jacket in Europe on completion.

Due to its substantial size, it is scheduled to be shipped out to the field on the world’s largest barge – the Heerema H-851. The quay at Kværner will even need to go through extensive upgrades to ensure the 260-meter long barge can be facilitated on its arrival.

“The steel jacket will also be one of the most complex ever built by the industry. Not only will we route the land-based power through the

JOHAN SVERDRUP jacket, we’ll also be controlling the subsea water injection and exporting the field’s oil and gas from it. In addition, we’re also preparing to tie in future phases of the Johan Sverdrup field development to the riser platform. In building this jacket, we’re in fact making preparations to take in as many as 56 conduits,” Kjetel Digre explained.

Kværner is set to deliver the two steel jackets to the development field – for the riser platform and one for the drilling platform – in 2017 and 2018 respectively, in a total delivery value estimated at NOK 3 billion.

In a further deal worth NOK 7 billion, the fabrication contract for both the processing and riser topside platforms was awarded to industry leader, Samsung Heavy Industries in June this year. Both topsides will be fabricated at Samsung’s shipyard in South Korea.

The processing platform, weighing an estimated 26,000-tons, will help to ensure oil stabilisation before processing this into rich gas. The riser platform, weighing just under the former at 22,000-tons, will control the oil and gas exports and the water and gas injections.

The power cable from onshore will end on this platform – the current is transformed from direct current into alternating current for further distribution to the field center.

“Johan Sverdrup is a large puzzle in which many suppliers must deliver with precision, quality and on time in order for us to start production towards the end of 2019, and this contract is yet another important milestone for the Johan Sverdrup project,” Margareth Øvrum, Executive Vice President for Technology, Projects and Drilling at Statoil, explained.

“Samsung has extensive experience in manufacturing such installations and we already have a good partnership with the supplier. They have provided a competitive bid in a tough international competition.”

With the topsides for the drilling platform and the accommodation platform awarded to Aibel (EPC) and Kværner Stord (EPC) and the remaining two more recently to Samsung Heavy Industries; all contracts for the four topsides have now been awarded. Additionally, 65% of the equipment packages have been awarded to suppliers with Norwegian billing addresses.

In a statement, Øivind Reinertsen, explained: “Johan Sverdrup will generate great values for the whole society for more than 50 years. We have now assigned a broad and strong team in the supply industry to construct the topsides for the four

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platforms. This provides an optimal basis for quality project deliveries on time and cost.”

In addition to the construction of the steel jacket and subsequent topsides, the 246-ton template for the wells is also in preparation, set to be pre-drilled on the field from March 2016. It is currently under construction at Vlissingen in The Netherlands.

OFFSHORE LIVING June was evidently the month of awarding contracts for the Johan Sverdrup field as the deal for both the utility and living quarters was settled. The EPC contract, worth NOK 6.7 billion, sees a joint venture between Kværner and KBR for the construction of the topside for both the utility and living quarters platforms.

“The market has shown a

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strong interest in this contract, and Kvaerner and KBR have won the contract in tough international competition,” explained Margareth Øvrum.

The utility and living quarters platform will consist of two modules - one utility module and one accommodation module. Under the management of Kværner, fabrication of the utility module will be done by subcontractors in Poland and completed at Stord Norway with KBR carrying out the EPC equipment work for the module.

The accommodation module will be constructed at Apply Leirvik’s yard in Stord Norway and in Emtunga Sweden.

Assembled at Kværner Stord, the topside will have a total weight of around 19,000-tons, with the utility module accounting for 9,700-tons and the accommodation module

9,300-tons.

“So far the Norwegian supplier industry has won the main Johan Sverdrup contracts. It is good to see that Statoil and the suppliers jointly are about to break the cost curve to ensure competitive force in a tough time for the whole industry,” Øvrum explained.

The utility and living quarters platform will, on completion, constitute the largest living quarters on the NCS with a bed capacity for up to 560 people.

Accommodating field personnel for more than 50 years, the platform is set to be completed in the first quarter of 2019 before it is installed at the Johan Sverdrup field using the world’s largest heavy-lift vessel, Pioneering Spirit.

All field production control and monitoring activities will be carried out in the control room on the

JOHAN SVERDRUP

platform, which will house all central support systems for the field centre, including emergency power, firewater systems, diesel, heat recovery and freshwater production.

The utility and living quarters platform will be connected to the processing platform at the Johan Sverdrup field centre using a gangway.

“On plateau, production will account for 25% of all Norwegian oil and gas production,” stated Øivind Reinertsen. “We have now awarded the project’s second main topside construction contract, and we are on schedule to meet an ambitious field development plan with production start on Johan Sverdrup at the end of 2019.”

Last month, the first building block was completed and installed onto the offshore project – the subsea template was designed, built and installed by Heerema Marine Contractors. Whilst the pre-drilling

© Harald Pettersen |

template stands as one of the smallest components of the development, it remains vitally important, playing a key role in the Johan Sverdrup project. Containing eight well shots, the completed template allows production wells to be pre-drilled before the drilling platform is installed in 2018.

There is no doubt that the world will continue to depend on oil and gas for many more years yet due to multiple and transferable uses including, but not limited to; food production, transport, heat and the production of everyday items.

Sitting as one of the five biggest oil fields on the NCS, the Johan Sverdrup field development is a truly

oil Stat

integral oil field providing sufficient energy for a global and growing economy. Production at the US$29 billion North Sea field is set to start by 2019 and with a projected break-even point of under $40 per barrel, it is expected to produce up to three billion barrels of oil equivalents over the next 50 years.

Once production is stable, operating costs at the field are expected to be under $5 per barrel.

Now and over the next five decades, Johan Sverdrup will be one of the most important and defining industrial projects in Norway, providing revenue and employment for many generations to come

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