OMV Deal Shows the Importance of the Johan Sverdrup Field to Norway

Statoil’s deal to sell a number of its stakes in North Sea assets to OMV (see table) for US$2.65 billion was based on their need to free up cash for the development of high-return core assets, with the Johan Sverdrup field being the most important of these new developments. Statoil expects to recognise US$1.3 to 1.5 billion as a gain on sale of these assets when the deal closes at the end of the year. This gain combined with the reassigned capital expenditure from those sold assets will allow them to invest US$7 billion into core asset development. The Johan Sverdrup field located in the Utsira High sector of the North Sea, extends over 180 km² and is composed of varying thicknesses of oil bearing strata. The Utsira High is 140 kilometres west of Stavanger and is regarded as a frontier zone within the North Sea and therefore a whole new major oil hub will need to be developed for this asset to be successfully exploited.

Johan Sverdrup is expected to come on-stream in 2018 and produce until 2050. Present reserve estimates are 1.7 to 3.3 billion barrels boe. Lundin Petroleum one of Statoil’s partners in Johan Sverdrup expects the field to plateau at 500,000 bbls/d of oil and at this level the field will produce more that 25% of Norway’s present oil production.

Statoil, as the operator for the development of Johan Sverdrup, along with its partners has been running an extensive appraisal drilling programme this summer that will allow them to produce a development concept scheduled for release by the end of the year and that will lead to a development plan being proposed to the Ministry of Petroleum and Energy in Q4 2014.

The Johan Sverdrup field is the combination of the Avaldsnes field discovered by Lundin Petroleum in 2010 on PL 501 (Lundin (operator) 40%; Statoil 40%; and Maersk 20%) and the Aldous field discovered in 2011 by Statoil on PL 265 (Statoil (operator) 40%; Petoro 30%; Det norske 20%; and Lundin 10%.)

This report was compiled using data from Evaluate Energy’s global assets and M&A databases. Evaluate Energy provides efficient data solutions for oil and gas company analysis, with an extensive M&A and global assets databases, 20+ years of historical financial and operating data, US shale and LNG offerings.

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