Norway's authorities have given the go-ahead for the latest in a series of oil tie-in projects by Aker BP aimed at boosting production from the Alvheim hub, which the company has plans to keep in operation until 2040, it said June 8.
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In a statement, Aker BP estimated reserves from the Tyrving tie-in project, previously known as Trell & Trine, at 25 million barrels of oil equivalent, and the cost of the three-well project at $700 million, saying the field would come on stream in the first quarter 2025.
Alvheim, with various existing tie-ins, loads from a floating production, storage and offloading vessel in the North Sea, with recent loadings in the region of 50,000 b/d. Gas is sent to the UK via the Scottish Area Gas Evacuation pipeline.
The crude is medium in gravity, unlike typical North Sea grades, with an API metric of 32.5, and is also low in sulfur.
Aker BP -- which has engineering company Aker and BP as its largest shareholders -- has cited refiners buying Alvheim as an alternative to Russia's Urals; in the aftermath of the invasion of Ukraine, CEO Karl Johnny Hersvik cited premiums to Dated Brent in a range of $4.50-$9.50/b for the grade.
The company estimated the new crude stream would come with a low CO2 footprint of 0.3 kg per barrel of oil equivalent produced.
The company launched production from another Alvheim tie-in, Frosk, in March, estimating resources there at 10 million boe. Another Alvheim tie-in, Kobra East & Gekko (KEG), is under development and due on stream in the first quarter of 2024.
Originally developed by US company Marathon Oil, the Alvheim area has produced triple the original projection of 171 million boe, and the goal is for volumes from the production vessel to eventually exceed 1 billion boe, Aker BP said.
Marking the 15th anniversary of production at Alvheim, Aker BP described it as one of Norway's most successful oil and gas developments.
"I am very pleased to see utilization of existing infrastructure to increase production of oil and gas," Petroleum and Energy Minister Terje Aasland was quoted by the company as saying. "This extends the lifespan of important fields... at a time when Europe needs all the energy we can supply."
Aker BP's senior vice president responsible for Alvheim, Ine Dolve, said: "New discoveries and fields linked to the Alvheim FPSO contribute to the fact that we are now planning operations until 2040 and have an ambition for the vessel to process a billion barrels before we shut down."
"It is people and technology, not luck, that has made Alvheim the success story it is today," she said. "The subsurface is challenging with many thin oil zones. The high recovery rate we have achieved is to a large extent attributed to a world-class subsurface team, drilling engineers and operations personnel."
Platts, part of S&P Global Commodity Insights, assessed North Sea benchmark Dated Brent at $76.71/b on June 7, up 42 cents on the day.