Equinor starts up Statfjord late-life oil recovery project ahead of schedule

Norway's state-controlled Equinor has started up its latest project to boost oil recovery and extend the life of the country's largest oil field, Statfjord, six months ahead of schedule, the company said Aug. 25.

Approved in 2020, the Statfjord Ost Project is set to recover another 26 million barrels of oil equivalent in the Statfjord Ost area, or 63% of the 410 million boe original "in place" resource estimate for Statfjord Ost. The current recovery rate is 58%.

The initial project involved drilling four new wells, making modifications to the Statfjord C platform, and installing a pipeline for gas lift, with an expected start-up in early 2024.

After adding plans for a fifth well, Equinor said two new wells have already been drilled from existing subsea templates, and three additional wells are yet to be drilled. As a result of the extra well and a slightly higher recovery target, Equinor said the investment for the project has increased from NOK 3 billion to NOK 3.5 billion ($279 million-$326 million).

"This proves the importance of extending the life of mature fields and maximizing value creation from existing infrastructure on the Norwegian continental shelf (NCS)," Equinor's senior vice president for field life extensions, Camilla Salthe, said in a statement. "The profitability is high, and the value of increased production equals around NOK 20 billion at the current oil price."

Equinor said it now expects to complete the project by the end of 2023.

Statfjord crude

The Statfjord field in the Norwegian sector of the North Sea, close to the maritime border between Norway and the UK's Shetland, was discovered in 1974, making it one of Norway's oldest producing fields.

Light sweet crude from Statfjord is offloaded directly onto tankers. Equinor estimates the field originally held around 9 billion barrels of crude. A small part of the field lies in UK waters, with tax revenues shared between the countries, but all the above-ground facilities are in Norwegian waters.

In early 2020, the company announced plans to extend production from Statfjord out to 2040 and to postpone from 2022 until 2027 decommissioning the first of the three main production facilities, Statfjord A.

Statfjord loadings are expected to total some 77,000 b/d in January, according to a recent loading program; however, the area is undergoing a revamp, with some crude from the nearby Snorre field no longer to be loaded at Statfjord, but redirected to another offshore loading facility at Gullfaks.

Loadings of Norway's Statfjord crude are set to average 51,667 b/d in September across two cargoes, according to a copy of the program seen by S&P Global Commodity Insights July 31.

Platts, part of S&P Global Commodity Insights, assessed Statfjord loading FOB in the North Sea at $85.595/b on Aug 24, a $1.62/b premium to Dated Brent.