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Aker BP sees Sverdrup oilfield's second phase starting early December

Published 26/10/2022, 06:52
© Reuters.

OSLO (Reuters) - Norway's giant Johan Sverdrup oilfield is expected to start Phase 2 production in early December, Aker BP (LON:BP), a partner in the Equinor-operated field, said on Wednesday, later than its previous forecast of October.

Phase 2 is expected to increase the field's production capacity by 220,000 barrels of oil equivalent per day (boed) just as the European Union's ban on Russian seaborne crude imports comes into an effect in December.

Aker BP revised its oil and gas production guidance to 410,000-420,000 boed from 410,000-435,000 boepd in its quarterly earnings report released on Wednesday.

"Our previous guidance was based on Phase 2 starting in October. As this is no longer relevant, we have revised our guidance," Chief Executive Karl Johnny Hersvik told reporters.

"We do expect Johan Sverdrup Phase 2 startup in early December and this would contribute significant production and cashflow growth next year," Hersvik later told analysts.

Equinor, which had previously forecast Phase 2 would start in the fourth quarter, did not respond immediately to a request for comment.

In June, Aker BP closed a deal to acquire upstream assets from Sweden's Lundin Energy, including a 20% stake in Johan Sverdrup, making Aker BP the second-largest listed oil company in Norway after state-controlled Equinor.

Aker BP reported total earnings before interest and taxes (EBIT) of $3.96 billion for the third quarter following the consolidation of Lundin's assets.

It did not provide comparable figures for the previous quarter. Aker BP's operating profit excluding Lundin's assets stood at $849 million in the third quarter of 2021.

Aker BP kept its quarterly dividend unchanged at $0.525 per share, but reduced its 2022 second-half capital spending guidance to $1.2 billion from $1.3 billion.

The company said it was ready to approve more than a dozen new upstream projects by the end of this year, but warned that inflationary pressures, rising borrowing costs and Norway's plans to raise petroleum taxes could impact some plans.

The projects include the Aker BP-operated 600 million barrels of oil equivalent (boe) NOAKA development in the North Sea and the Equinor-operated 500 million boe Wisting in the Arctic Barents Sea.

Aker BP's Oslo-listed shares opened 3.1% down and were trading 1.7% lower by 0800 GMT, underperforming a wider European oil and gas index that was broadly flat.

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