In 2010, Lundin Energy Norway made a discovery that hardly anyone thought was possible. Ten years later, Johan Sverdrup employs 4000 people and is slated to contribute 14 million kroner, each hour, to the Norwegian treasury.
In the early hours of an August morning, an almost five-metre-long subsurface sample is lifted onto a rig in the North Sea. Bathed in light from large floodlights, the geologist on board sees black droplets from the core sample pool into small puddles on the drill floor. The rig crew in their coveralls and helmets recognise the smell of oil. They’re starting to understand that they’re making history: In two attempts, the newcomer Lundin, along with its partners, has discovered two oil fields on the Norwegian shelf in an area that had been explored for 40 years without major discoveries.
6 August marks the tenth anniversary of the drill bit encountering the Johan Sverdrup reservoir. Now we know that, over time, this oil field will account for one-third of Norway’s oil production and secure the pensions of thousands of Norwegians. But this discovery was no sure thing. This is a story of explorers who challenged established truths.
It started in 2004, when nine experienced contractors took on challenging concepts on the Utsira High South. Drilling had been taking place here since the first wells on the Norwegian shelf.
Most had given up on the area. But not the exploration manager in the new company, Hans Christen Rønnevik. He was the one who drew the first shelf maps for the Norwegian Petroleum Directorate in the ’70s.
Throughout a long career, he’s always believed that something big could be lurking on the Utsira High. This is why Lundin applied for drilling permits for its first wells here. To the surprise of many, the optimists at Lundin were awarded licence 338 on the Utsira High, but on one condition: the company had to include a partner with more experience.
However, this courtship proved more challenging than initially presumed. Few shared this positive view of the area. All of the most important players on the Norwegian shelf, a total of 30, were invited to participate. In the end, only RWE Dea and Revus accepted the invitation to be part of these risky plans from the challengers in Lundin – but this was enough for a drilling permit for their first well.
Drama on deck
Hans Christen Rønnevik and a colleague are following closely from their PCs at the Lysaker office as the first well is drilled. This was “make it or break it” for the newcomer. Rønnevik is an optimist. He has discovered billions of barrels of oil on the Norwegian shelf through the course of his career, he mapped the Utsira High himself, and can visualise the subsurface in his head.
But when the drill should have reached the alleged reservoir, there is some terrible news: The drill crew report that they have struck bedrock, the reservoir’s “basement”, and there is no oil here. Game over. The logs are also devoid of any traces of oil or gas. Lundin’s first drilling on the Norwegian shelf seems to be a fiasco.
Haugesund native Rønnevik’s response to this? “Hell no.”
He knows something isn’t right. Rønnevik decides to take a new core sample.
The rig workers start extracting a new piece of the subsurface, almost 2000 metres below sea level. When the geologist on board studies what is later referred to as Norway’s most valuable core sample, it is slowly but surely confirmed: There is oil on the Utsira High South.
The Edvard Grieg discovery was a fact. The drilling logs were wrong and Rønnevik was right. This discovery alone was large enough to make Lundin a considerable player on the Norwegian shelf. But the knowledge from Edvard Grieg blazed a trail for something much bigger.
Tracking an elephant
With the information from the Edvard Grieg discovery, the hunt for oil carried on. The challengers in Lundin had cracked the code on the Utsira High, and this raised quite a few eyebrows. So they no longer found themselves alone in applying for drilling permits in other parts of the area they found promising for major discoveries.
Both the joy and the surprise were significant when, in early 2009, Lundin was awarded 40 percent and operatorship in the licence, which will later be known as part of Johan Sverdrup – a vote of confidence from the authorities.
On the morning of 6 August, Lundin is starting its second attempt on the Norwegian shelf. Statistically, six of ten wells on the Norwegian shelf are dry. Yet again, Lundin has taken significant risk as an operator in an area where few have succeeded before.
But then video streams into the Lysaker office from the rig in the North Sea: core samples full of oil.
Johan Sverdrup will produce between 2.2 and 3.2 billion barrels of oil, which will generate more than NOK 900 billion for Norway over they next 50 years.
The legacy lives on
Ten years after the Johan Sverdrup discovery, Lundin Energy Norway has evolved into an experienced developer and operator, but remains one of the most active explorers on the Norwegian shelf.
“We like to call ourselves explorers by nature, and we believe that it’s important to take a chance. When we find what we’re looking for, we grow a little.
When we don’t find it, we get a little wiser,” says Lundin Energy Norway’s Managing Director Kristin Færøvik.
“The legacy from the challengers in 2004 is still in the company’s DNA. This relentless curiosity made us one of the world’s leading oil companies, and is the reason why we find new solutions that make us a little better every day. This will also hopefully lead us to the next major discovery on the Norwegian shelf.”