Equinor to extend Statfjord field life with 100 new wells

Equinor and its partners in Norway’s Statfjord area have identified and approved plans to extend production from the field towards 2040. Equinor has acquired 6,500,000 shares in Scatec Solar, corresponding to 5.2 percent of the shares. A new business plan will ensure even higher use of resources, extract more value from the field.

The shares purchased by DNB on behalf of Equinor on 10 December 2019. On 10 December Equinor completed the acquisition of a 50 % interest in the offshore wind development project. It allow plans for decommissioning Statfjord A in 2022 to be deferred. Equinor and Masdar have joined forces with ORE Catapult to share floating offshore wind data.

Based on extensive mapping of the underground the remaining potential of the Statfjord area is still considerable. Equinor has signed an agreement to divest to Repsol its 63% interest in. Equinor and its partners have therefore resolved a new, ambitious business plan for the Statfjord main field.

On behalf of the Gullfaks and Snorre partners, Equinor today signed contracts totalling around NOK 3.3 billion. Vår Energi, Spirit Energy Norway, Petoro, Idemitsu Petroleum Norway, and Wintershall Dea Norge are partners in the Statfjord area, Equinor is operator. Equinor is the operator for 21 projects in the execution phase, with a total investment of around 210 billion kroner.

Statfjord A was scheduled for decommissioning in 2022, however, the field life will now be extended to 2027. The purchase price per share is NOK 116 which compares to the closing price on 19 December of NOK 110.5. The lives of Statfjord B and C will be extended beyond 2035, continuing to create high value from the field.

The company now has an interest in all three Bałtyk offshore wind development projects. Statfjord has generated 1600 billion NOK gross income to the owners and the Norwegian society. The transaction covers all of Equinor’s interests in the Eagle Ford Joint Venture with Repsol, covering 69 000 net acres.

Arne Sigve Nylund, Executive Vice President says “We have a responsibility to society and our owners for realizing the full value potential from our producing fields”.

Statfjord is a world-class oil and gas field that has supplied the world with huge amounts of energy. The total consideration is USD 325 million. The field has created high value and been a cornerstone in the development of the entire Norwegian petroleum industry. The acquisition of Baltyk I strengthens our presence in the Baltic Sea area.

It is therefore a pleasure to see together with partners in the area. The transaction supports Equinor’s strategy to optimise onshore US portfolio. It can extend the production period and continue the value creation. The US is a core area for Equinor, demonstrated by recent acquisitions including assets in the Gulf of Mexico.

The new plan calls for extending Statfjord production by maturing new reserves for recovery and making necessary upgrading of the platforms. Equinor’s primary insiders and their close associates have been allocated shares. Equinor entered the Eagle Ford asset in 2010 through a joint acquisition with Talisman Energy USA.

Around 100 new wells will be drilled towards 2030. Equinor increased its interest in the joint asset from 50% to 63% and assumed full operatorship. The wells will help reach an ambition of maintaining the current production level from Statfjord beyond 2025. Hywind Scotland is now available to access on a free to use basis for supply chain businesses.

This will require considerable investments and upgrading of the three platforms. The Bałtyk I offshore location license allows for a development of a wind farm with a capacity up to 1560MW. The effective date of the transaction is 1 October 2020. Equinor wil continue to improve operations to keep costs at a low level.

The contracts have been awarded to Kvaerner AS, Siemens Gamesa Renewable Energy AS. The operations will be reorganized and a new late life unit will be established in Equinor. Equinor will be the manager for the construction preparation and the potential construction and operational phases.

The new unit will develop new ways of working for safe and efficient operation with low carbon emissions from late life fields on the NCS. It was in 2018 that Equinor acquired a 50 % interest in the offshore wind development projects Bałtyk II. The new unit will be central in securing optimal recovery of resources from Equinor’s oil and gas fields on the NCS.

The new late life unit will also have responsibility for the decommissioning projects for the Veslefrikk and Heimdal installations. The POD service is designed to offer comprehensive data sets from offshore wind. The signing of five major contracts is a key milestone in realizing the Hywind Tampen pioneer project.

Equinor has cooperated with all five trade unions in the company: Industri Energi, SAFE, NITO, Tekna and Lederne. Equinor further strengthens its exposure to the fast-growing solar energy sector. It leading to higher employment and more value creation it is truly an adventure. The awarded contracts will generate considerable spin-offs in Norway.

“We are pleased about Statfjord operations being extended for many years”, said Bjorn Asle Teige, employee representative.

The requirement is that safety is given top priority, continues Teige. The shareholding in Scatec Solar remains an important long-term investment for Equinor. Jobs on the NCS are highly profitable and important to Norway. It is good social economics to utilize the NCS infrastructure that have invested in.

It make optimal use of the Norwegian community’s resources. Masdar and ORE Catapult, subscribers can access a pre-defined set of full-scale measurements. Repsol will acquire a 20% non-operated interest in the Monument prospect. This is something people on the NCS focus on every single day.

It will be more important for the petroleum industry going forward, continues Labrathen. Bałtyk III have a combined planned capacity of 1,440 MW with the potential power. The substructures will be designed and constructed by Kværner. The new Statfjord effort includes a plan for keeping CO₂ emissions as low as possible through the late life period.

It ensure that Statfjord is operating well within the limit of Equinor’s new NCS climate ambition. It allowing the company to utilize its expertise in concrete structures on the Norwegian continental shelf. CO₂ emissions per produced barrel from the field will be halved due to higher production.

Several operational measures for increased energy efficiency have been identified to maintain a constant level of energy consumption. The substructures will be constructed at Kværner’s yard at Stord and site at Dommersnes in the Vindafjord in Norway. Equinor will realize energy efficiency measures.

The shared long-term goal is to reduce the cost of floating offshore wind. It consolidate infrastructure to reduce absolute emissions from Statfjord by more than 40 percent. This initiative shows Equinor’s strong commitment to support dissemination and education in the UK.

It means that climate emissions from Statfjord is aligned with Equinors new climate ambition for the NCS. The project will involve several Norwegian engineering communities. The electrical cables will be delivered by JDR Cable System Ltd. It reduce absolute emissions in Norway by 40 percent within 2030, 70 percent by 2040 and close to zero by 2050.

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