Equinor gets go-ahead for first Johan Sverdrup oil flows

London — Equinor and its partners have been given the go-ahead to begin commercial production from the giant Johan Sverdrup oil field in the North Sea, the Norwegian Petroleum Directorate said Monday.

Previously expected to start up in November, the NPD's approval comes days after Equinor signaled a likely early launch of the major oil development.

The first cargo of 1 million barrels will load from Norway's Mongstad terminal on October 9-11, according to a loading program issued by Equinor and seen by S&P Global Platts last week. A further 10 more cargoes, each of 600,000 barrels, are expected later in the month. Crude loadings from the field will total 7 million barrels, or an average of 225,806 b/d for the month as a whole, according to the program.

In a statement, the NPD said Monday that state-controlled Equinor plans to start up Sverdrup "sometime this autumn."

Equinor had previously said production would start in November and rise to a "plateau" level of 440,000 b/d next summer, with a second phase coming on stream in 2022 and due to lift output to 660,000 b/d. Such high volumes from a single field have not been seen in the North Sea in years. The field is estimated to hold 2.7 billion barrels and is unusual in producing relatively heavy crude compared with regional norms, with an API gravity of 28.

Equinor has hailed the project as breaking new boundaries, including in the proportion of total crude that it expects to actually recover, which should reach 70%. It has also boasted repeated cost reductions, with the first phase now expected to cost NOK83 billion ($9 billion).

The original Johan Sverdrup discovery was made in 2010 by Swedish-owned Lundin Petroleum, which still holds a 20% stake in the field, alongside Equinor's 42.6%. Total and BP have both taken minority stakes, BP indirectly through its Norwegian joint venture Aker BP.

-- Robert Perkins, robert.perkins@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com