Thanks to our hard-working employees and good cooperation with our suppliers, Lundin Energy Norway has seen high project activity and efficient production through a challenging six-month period.
Throughout the corona crisis and the drop in oil prices, the Company’s primary focus has been to handle the infection situation and protect the employees’ health, while at the same time maintaining oil production.
“We’ve succeeded in handling the pandemic in a way that enabled us to maintain production and good progress in important projects. I’d like to sincerely thank all our employees, and not least our suppliers, for the efforts that made this possible,” says Managing Director Kristin Færøvik.
Two development projects are under way on the Edvard Grieg field, Solveig and Rolvsnes, both of which were on schedule until March 2020. Enabled by the continued out performance at Edvard Grieg and in order to phase the development spend on these projects over a longer time period, the start-up dates for both projects have been pushed back in order to handle the risk associated with corona, but without affecting the Company’s production levels in 2021 and 2022.
Several projects on track
In addition to the development of Solveig and Rolvsnes, several hundred people have been working on important longer-term projects on the Edvard Grieg field.
In May, Lundin completed an extensive seismic operation on the Edvard Grieg field to secure better understanding of the reservoirs. The data was processed at record speed and will provide us with better knowledge about the placement of the three infill wells, scheduled to be drilled on the field in 2021.
In June 2020, Lundin signed a contract with the Norwegian company Parat Halvorsen, which will deliver electric boilers to cover the need for heat on the platform when the field is supplied with power from shore. This means that we are on track for full electrification of Edvard Grieg by 2022.
“We’ve always had a strong cost discipline culture in the company, even in good times. This gives us the opportunity to take a long-term approach and keep our foot on the gas, when oil prices fall rapidly and unexpectedly,” Færøvik says. She emphasises that the authorities’ stimulus package has provided the necessary security.
“It’s been impressive to see how the industry came together to handle the crisis. The stimulus package has yielded immediate effects. For Lundin, the tax changes have resulted in a strong motivation to accelerate or initiate new activity.”
Record-low production costs
The Edvard Grieg platform has achieved a production efficiency of 99 per cent so far this year. In line with the authorities’ production restrictions, Lundin Energy Norway has adjusted its production target down to 157,000 barrels of oil equivalent per day on average for the full year 2020.
Lundin Energy Norway produces oil from the Johan Sverdrup, Edvard Grieg and Ivar Aasen fields, as well as fields in the Alvheim area. According to Lundin’s figures for the second quarter, each barrel produced from these fields so far this year has come at an average cost of USD 2.78. This is in line with the target of USD 2.80 per produced barrel in 2020.
“In addition to good reservoir properties in our fields, much of the credit for Lundin Energy Norway remaining one of the most efficient offshore oil and gas producers offshore goes to our smart engineers and creative geologists,” Færøvik says.