Construction for Johan Sverdrup platform begins

HAUGESUND, Norway, Feb. 15 (UPI) -- Norwegian energy company Statoil said Monday the first steel was cut for the drilling platform designated for its much-anticipated Johan Sverdrup field.

Fabrication of parts of the 22,000-ton platform started Monday at a shipyard in Haugesund, a port city in northern Norway. Platform installation at the Johan Sverdrup field on the country's continental shelf is slated for 2018.

"The most complex platform on the Johan Sverdrup field the drilling platform will come on stream at the end of 2018," Kjetel Digre, Statoil's senior vice president for the Johan Sverdrup project, said in a statement. "We will then start phasing in the pre-drilled wells before production from the field commences at the end of 2019."

Statoil and its partners at Johan Sverdrup, Maersk Oil and Lundin Petroleum, in early 2014 outlined the development plan for the field using multiple phases.

At least half of the secondary construction contracts for Johan Sverdrup are slated for Norwegian companies. Statoil last year awarded a construction contract to Norwegian firm Aibel, which started the work Monday in Haugesund,

Statoil said the first phase of operations at the offshore field should yield as much as 380,000 barrels of oil per day, roughly half of the expected peak production rate. Once in full swing, the field, the fifth largest ever discovered off the Norwegian coast, should account for as much as 25 percent of all Norwegian petroleum production.

The company outlined a capital spending plan for 2016 of around $13 billion, down about 11 percent from last year. Earnings for the fourth quarter were down 44 percent year-on-year to $1.75 billion.

Statoil said that, so far, the cost of development for Johan Sverdrup is lower than expected.