Norway's Sverdrup crude output seen declining 'very late 2024'/early 2025: Aker BP chief

Norway's flagship Johan Sverdrup field was expected to enter production decline "very late 2024" or early 2025, the CEO of second-largest stakeholder Aker BP, Karl Johnny Hersvik, said July 12.

The Sverdrup partners aimed to finalize selection of a concept for the Phase 3 development of Sverdrup in the fourth quarter 2024, with a view to production startup in late 2027, Hersvik told an investor presentation.

On stream since 2019, Johan Sverdrup is by far Norway's highest-producing oil field, with current capacity around 755,000 b/d, and actual crude output in Q1 2024 of 705,000 b/d, according to the Norwegian Offshore Directorate.

That meant it accounts for at least a third of Norwegian oil production at present. The crude is atypical of the North Sea, being a medium sour grade, and has often sold at a premium to the Platts Dated Brent benchmark.

The field operator, state-controlled Equinor, previously confirmed expectations Sverdrup would go into decline in late 2024 or early 2025, and Hersvik's comments appeared to provide more precision.

Some 10 wells are to be added at the field in the course of this year, of which five have so far started up, with the addition of new wells intended to limit water production, he said.

"So far the wells have been reacting quite positively. As a result of that we expect the current production rates at Johan Sverdrup to extend into very late 2024-early '25."

Next steps for the consortium include the "retrofit" of existing wells next year, with new multi-lateral wells that extend out from the main wells -- maintaining the existing well casing and "Christmas Tree" production systems -- with "quite a few of these" planned, Hersvik said.

Advantaged crude

Separately, Aker BP said it was bringing forward the startup of a tie-in project at the Alvheim field known as Tyrving, with production expected to begin in October 2024 rather than Q1 2025 and set to add to already rising volumes from the core Alvheim hub.

Alvheim qualifies as a light crude and is low in sulfur, but is heavier than major North Sea crudes such as Ekofisk and Troll, with an API gravity of 33.9 according to BP.

Alvheim was assessed by Platts at a $4.10/b premium to Dated Brent on July 11, likely reflecting the premia enjoyed by medium and heavy crudes in Europe since the outlawing of Russian Urals imports. Platts is part of S&P Global Commodity Insights.

Aker BP noted some weakness in production at two fields that feed the Grane heavy crude blend: Edvard Grieg and Ivar Aasen -- although that is set to be offset by a new tie-in known as Hanz that came on stream in April.

Edvard Grieg production was down 38% year on year in the second quarter at around 71,000 b/d. Reduction at Grieg and Aasen "was driven by natural decline and lower production efficiency due to scheduled maintenance and a shutdown connected with the start-up of Hanz in April," Aker BP said.

Dated Brent was assessed by Platts at $87.32/b on July 11, up 24 cents/b on the day.