Production at Ærfugl Phase 2 Well Ahead of Schedule
Operator Aker BP and partners began production from the first Ærfugl Phase 2 well in the Norwegian Sea, coming 3 years ahead of schedule. The announcement also comes 5 months after Aker BP and partners Equinor, Wintershall DEA, and PGNiG approved the final investment decision for Phase 2.
The NOK 8 billion ($753.3 million) project is a development in two phases (phase 1 and 2), producing oil from the Ærfugl field via the Skarv floating production storage and offloading (FPSO) approximately 210 km west of Sandnessjøen on the Norwegian shelf.
The plan for development and operation for both phases was approved by the Ministry of Petroleum and Energy in April 2018. Phase 1, which develops the southern part of the Ærfugl field, consists of three wells with startup in late 2020; Phase 2 comprises another three wells in the northern part of the field. The remaining two Phase 2 wells will come on stream in 2021.
Although the project is progressing ahead of its initial plan for a 2023 start, Aker BP noted it comes as the company has stopped all nonsanctioned projects due to the dramatic change in the market situation.
“The acceleration of production from Ærfugl Phase 2 means increased value creation for the Ærfugl joint venture, the supplier industry, and the Norwegian society in the form of increased revenues,” said Kjetel Digre, senior vice president of operations and asset development for Aker BP. “However, the good news is offset by the fact that we are facing a global crisis that none of us have experienced before. Investments and explorations activities offshore Norway are put on hold. Tens of thousands of employees in our industry are currently at risk.”
Digre added that it is clear that the industry’s proposal for temporary adjustments in Norway’s tax regime to improve the industry’s cash flow in the short run—without reducing the total tax payments in the long run—will result in increased activity and new investment opportunities offshore Norway within the next 12–24 months.
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