Johan Sverdrup giant on track, may exceed initial output target: Lundin

London — Norway's giant Johan Sverdrup oil field is on track to achieve its phase 1 output target of 440,000 b/d this summer and may exceed that level, despite the coronavirus crisis, Alex Schneiter, CEO of Lundin Petroleum, which discovered the field, told S&P Global Platts Tuesday.

The comment, in a telephone interview from Geneva, came as Lundin announced a 12% cut in its spending plans this year and a cut to its dividend in what Schneiter called a "prudent" response to the market environment.

On Johan Sverdrup, which has an estimated 2.7 billion barrels of oil reserves and came on stream last October, Schneiter noted that nine of the 10 wells planned to achieve the target production level were already on stream, with the 10th currently being drilled. "I feel very comfortable that we will meet our objectives on Johan Sverdrup," said Schneiter, whose company holds a 20% stake in the field, while state-controlled Equinor is the operator.

Based on experience from other fields and the performance of Johan Sverdrup so far, the first phase of the development could exceed the targeted "plateau" production level of 440,000 b/d, even without taking into account the second phase, which is due on stream in late 2022, he said, adding, however, that all 10 wells would need to be on stream to test that possibility.

"It's not unreasonable to believe that you can increase capacity on Johan Sverdrup phase 1," Schneiter said.

Schneiter went on to say that Norway's oil and gas industry, including companies, trade unions and the government, were working well together to deal with the coronavirus crisis and were well prepared. He voiced confidence in the ability of facilities such as Johan Sverdrup and the company's Edvard Grieg facility to carry on producing under current minimal levels of offshore staffing, together with other precautionary measures in place.

Loadings of Johan Sverdrup crude are expected to average some 430,000 b/d in April, according to a loading program seen by Platts last month.