Statoil gets nod for early phase of Johan Sverdrup

STAVANGER, Norway, Aug. 21 (UPI) -- Norwegian energy company Statoil said the first phase of development plans for the giant Johan Sverdrup oil field were approved by the government.

"We are on schedule in the Johan Sverdrup development," Oivind Reinersten, Statoil's senior vice president for development, said in a statement. "The project activities will now be stepped up, and more contracts will be awarded in the autumn."

First oil is expected late 2019. 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.

A Norwegian metal worker in late June started cutting steel for the jacket, the tower support structure, for a riser platform used for Johan Sverdrup. At a designed 26,500 tons, the entire jacket will be the largest in Europe once completed.

The first phase of operations at the field will represent $15 billion in investments. Statoil estimates Johan Sverdrup should generate $200 billion in revenues over the next 50 years.

"Contracts worth more than $4.8 billion have been awarded so far in the development, 75 percent of which have been landed by suppliers with Norwegian invoice addresses," Reinertsen said.

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.

Statoil's announcement follows a government report showing weak economic growth for Norway, which relies heavily on the energy sector to drive its economy. Statistics Norway reported seasonally-adjusted gross domestic product for the second quarter rose 0.2 percent.

"The weak trend is particularly seen in industries supplying the petroleum industry," it said.