Equinor ASA EQNR-operated Johan Sverdrup oil field in Norway, which was expected to come online ahead of its schedule, has commenced production last Saturday. The mega project in the North Sea was initially thought to be operational in December.
Johan Sverdrup, one of the largest discoveries on the Norwegian Continental Shelf (NCS) is estimated to boast supplies up to 2.7 billion barrels of oil equivalent.
The first phase of the project will see this giant oil field’s day-to-day production reach 440,000 barrels of oil per day (bpd) next summer whereas its peak output is projected to soar 660,000 bpd in the second phase, accounting for one third of Norway’s total petroleum production. Per a trading source, the first shipment for Sverdrup oil filed will comprise 15 cargoes in November, resulting in average shipping of 300,000 barrels per day.
The first phase of the Norwegian project will pool in NOK83 billion as investments while the endeavor, which is marked to begin the second phase of its production in late 2022, will require NOK41 billion in capital expenditures. In the process, Johan Sverdrup may generate average employment for 3,400 people annually.
It is believed that the start-up of Johan Sverdrup’s first phase will help Equinor revive production from its Norwegian fields that suffered a plunging output over the past year and half due to natural decline and technical issues.
In order to lower the emissions of climatic gases offshore by 80-90% while delivering valuable barrels, the field will be run by electrical power, created onshore.
Equinor holds a 42.6% stake in the Johan Sverdrup development process while Swedish oil producer Lundin Petroleum AB (who discovered the field in 2010) owns 20%. The remaining interests are held by TOTAL SA, Aker BP and Petoro.
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Equinor carries a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include BP Midstream Partners BPMP, Dril-Quip, Inc. DRQ and TransCanada Corporation TRP, each carrying the same solid Zacks Rank as Equinor. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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