Equinor's Sverdrup Field Elevates Plateau Production Target
Equinor ASA EQNR-operated Johan Sverdrup oil field in Norway, which came online ahead of schedule in October 2019, saw growth in its oil production to around 430,000 barrels per day (bpd) by March-end.
With this solid surge in production, the giant oil field hopes to achieve plateau production in the first phase during the first half of May ahead of schedule. Its phase one plateau production target of 440,000 bpd, which was earlier projected for this summer, is now modified to be 470,000 bpd. Also, its anticipated maximum output of 660,000 bpd in the second phase is improved to 690,000 bpd. The company aims to attain a recovery factor of a minimum 70%.
The aforementioned good news comes with WTI crude price plunging to $20.09 yesterday, marking the lowest settlement since February 2002. However, this Norway-based company’s lower production cost of less than $2 a barrel together with the breakeven price of less than $20 for full-field development of Johan Sverdrup makes it resistant to vulnerable oil prices.
Per partner Lundin Petroleum, Equinor commenced drilling the first of its two new production wells in January 2020 to attain the first-phase plateau after witnessing output from its eight pre-drilled wells in 2019.
The oil field, which is one of the largest discoveries on the Norwegian Continental Shelf (NCS), makes the North Sea field western Europe’s largest oil production hub. The output is generated from the vast swathes across Equinor’s Troll and ConocoPhillips’ COP Ekofisk fields in Norway besides Britain’s Buzzard, which is operated by a unit of China’s CNOOC Limited CEO.
It is believed that this start-up of Johan Sverdrup’s opening phase is helping Equinor revive the spurt in production from its Norwegian fields that suffered a massive setback over the past year and half due to natural decline and technical issues.
In order to check the toxic emissions offshore by 80-90% while delivering valuable barrels, the field will be run by onshore-regulated electrical power.
Equinor currently has a Zacks Rank #3 (Hold) and a 42.6% stake in the Johan Sverdrup development process while Swedish oil producer Lundin Petroleum AB (who discovered the field in 2010) owns 20% interest. Remainder of the shares is held by TOTAL SA TOT, Aker BP and Petoro. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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