28 November 2015 – that’s the day we started producing from the Edvard Grieg field. During the five years since then, the field has provided employment for more than 4000 full-time equivalents, with ripple effects across society of around 5 billion Norwegian Kroner (NOK). The field has also contributed more than NOK 25 billion to the Norwegian State. And there’s more to come!
The Edvard Grieg field has exceeded expectations from day one, both in terms of the quality of the underground reservoir and the production facilities themselves.
“There will always be changes and deviations compared with what you expect in advance when you build a new platform and open a new oil field. What’s unique about Edvard Grieg is that all the major changes have been extremely positive,” according to Lundin Energy Norway’s Head of Field Operations, Kari Nielsen.
“The platform has achieved very high levels of production uptime and, alongside increased capacity in the process plant, the reservoir properties have also significantly improved. All these factors help boost the economics of the field”.
When the development plans for Edvard Grieg were submitted to the authorities, the assumption was that the field would produce 186 million barrels of oil equivalent. This number has been adjusted upwards multiple times, as production experience has provided more information about the reservoir. The most recent estimates now indicate that the field will produce 350 million barrels of oil equivalent, which represents almost double the original estimate and there is further upside potential.
There are three simple reasons for this impressive increase. First, the field contains more oil and gas than first expected due to better properties in the reservoir. Second, the recovery factor is higher than the original estimate due to favourable reservoir characteristics and an optimal drainage strategy.
“The third factor is the excellent job done by our people,” says Kari Nielsen.
“From day one, we have worked to optimise production based on data we secured from the wells and from new seismic imaging. The achievements made at Edvard Grieg represent the effort of the whole Lundin organisation, and are proof that our culture of exploring, in the wider sense of the term, creates value.” says Kari Nielsen.
In order to maximise the utilisation of the resources in the field, Lundin has continuously adjusted the original drainage strategy based on data collected through the development and production phases. 2 pilot wells and 3 appraisal wells have been drilled after the development plan (PDO) was submitted.
The substantial increase in Edvard Grieg reserves has come without requiring significant additional investments, which makes these very cost-effective barrels indeed.
Edvard Grieg is also the first oil field in the world to be verified and certified independently as producing a low-carbon barrel of oil. Whilst the world average carbon emission intensity per barrel of oil equivalent (boe) is 18kg, Edvard Grieg is only 3.8kg, as independently verified. This will drop to less than 1 kg per boe once the platform is fully electrified using power from shore from 2023.
Benefits for the broader community
When the decision was made to develop the field in 2012, the project was financially robust. However, the updated estimates now show a significantly improved financial return for the licence owners and shareholders, and a solid contribution to the State and the Petroleum Fund. As an oil company we pay 78% tax on our profits that allows us to contribute significantly to the national economy. In just five years, the Edvard Grieg field’s contribution in the form of tax revenue to the State has surpassed NOK 25 billion. Over the entire field lifetime, estimates indicate that may well exceed NOK 60 billion to the broader community.
Lundin Energy Norway is the operator for the Edvard Grieg field with an ownership interest of 65 percent. Other licensees are Wintershall Dea Norge and OMV Norge.