The giant Johan Sverdrup oil field in the North Sea could generate as much as $200 billion in revenue over the next 50 years, Norway oil conglomerate Statoil ASA estimated Monday.
At peak production, the field could produce up to 650,000 barrels of oil per day, equaling nearly half of Norway’s current output, Statoil said in a news release. But development of the field will also come with a hefty price tag — $32.5 billion, which would make the project the most expensive European oil and gas project ever. Statoil, with partners Lundin Norway and Maersk Oil, will submit development plans to the Norwegian government in 2015. The company expects to start up production in late 2019.
Lundin Norway will be the operator. Lundin and Statoil each will own 40 percent stakes in the project, and Maersk will own the remaining 20 percent.
The commitment to dumping billions into developing the Sverdrup field comes at a time when other oil and gas producers have dialed back their estimates for capital expenditures in 2015. Crude oil prices have plummeted – Brent crude, the price benchmark for Europe, slipped to $85.15 in Monday trading– amid a supply glut and weak global demand.
But according to the Wall Street Journal, analysts expect the Sverdrup field to remain profitable even with prices as low as $40 a barrel. When the field was discovered in 2010, Sverdrup represented the biggest oil find in the North Sea in decades, estimated at nearly 3 billion barrels of oil equivalent.
“Johan Sverdrup represents all we stand for as an industry and our faith in the future. This will be a gigantic project that will secure energy supply and jobs and result in substantial spin-offs and value for Norwegian society, the industry and the partnership behind the development,” Arne Sigve Nylund, Statoil executive vice president for Norwegian development and production, said in a statement.
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