A part of Europe’s oil history is coming to an end. The Norwegian giant Equinor has confirmed that Johan Sverdrupthe largest crude oil field in all of Europe (measured by its production), is about to enter the decline phase. As published elEconomista.esthis field will begin to gradually reduce its production in 2025. Although its impact on Norway’s aggregate crude oil pumping will be relatively small, this decline is expected to begin in early 2025, a little later than expected (it is he even spoke of the end of 2024). This deposit has been key for Europe in recent years, supplying around 7% of all demand on the Old Continent. With Russia’s invasion of Ukraine and subsequent sanctions, Norwegian crude oil gained even more relevance.
The Johan Sverdrup field is located on the Norwegian continental shelf. In addition to being the largest crude oil field in Europe by production, It is one of the largest and most important oil discoveries in the North Sea in history. The crude oil it produces is light oil, with a low sulfur contentmaking it more desirable in international markets due to its lower need for refining compared to heavier crude oils.
The importance of Norwegian energy to Europe has grown significantly following the sanctions imposed on Russia, which has led to a decrease in imports of Russian oil and gas. Norway has thus become a crucial supplier to compensate for this loss and ensure the continent’s energy security. Johan Sverdrup, with its capacity to produce up to 750,000 barrels per day, has been instrumental in keeping Norwegian exports stable and in meeting the growing crude oil needs in Europe, especially in times of uncertainty in global markets.
Record field production
Just a few weeks ago, this Norwegian field reached a record daily production of more than 756,000 barrels of oil per dayequivalent to around 6%-7% of Europe’s daily oil consumption, according to Equinor. After the record, comes the decline: “We expect Johan Sverdrup to leave this production plateau at the beginning of 2025”admitted the CEO of Equinor Anders Opedal in a press conference collected by the agency Reuterss. With this news, the Norwegian oil industry admits that the golden era may have been left behind. Although the upward trend of this field has been short-lived, it is also true that from the first moment it began to pump large quantities of crude oil. This field has already pumped more than 1 billion barrels since it came online in October 2019.
Although production will no longer be able to grow further at this field, it is now expected that production will stabilize slightly below 756,000 barrels for a few yearsso that it begins to fall progressively from 2030, as revealed by the EIA and S&P Global. The advancement of technology in the industry has made it possible to extract more oil per day than was initially thought and, in addition, decline or decay could be managed efficiently to prolong its production as much as possible.
This field now represents more than 40% of Norway’s total crude oil production.which places it at the epicenter of the country’s oil industry. Most of its crude oil goes directly to Europe, since Norway consumes a very small amount of crude oil, not only because of its small population, but also because of its strong commitment to renewable energies. In this way, Norwegian crude oil largely flows to the United Kingdom, the Netherlands, Germany or France, which are highly dependent on Norwegian energy supplies, especially since the war in Ukraine. Norway also exports to some countries outside Europe, but its main focus has been on meeting European demand.
At first, Its maximum planned production was 660,000 barrels per day.. However, the sophisticated Norwegian industry, led by Equinor (which has other projects underway), has managed to raise this amount to the current record, raising its potential by 100,000 barrels per day more than expected. However, crude oil is a finite good and extracting it faster means that the decline phase will arrive sooner, as noted previously. Johan Sverdrup went through two development phases, one that began in October 2019 and another in December 2022, which marked the great leap to current production levels. The US Energy Information Administration (EIA) already announced a few months ago that the crude oil field could begin to decline in 2024 or 2025.
To understand the importance of this field, it is only necessary to point out that the country’s second most important oil field (the Snorre field, also in the North Sea) is producing about 95,000 barrels per day. That is, Sverdrup pumps seven times more oil every day than the second largest field in the country.
A field that runs on renewable energy
Johan Sverdrup was discovered in 2010, and after several years of development and investment, production at Johan Sverdrup officially began in October 2019. Operated by Equinor (formerly Statoil), this field has been a key player in the expansion of oil production from Norway. The importance of Johan Sverdrup lies not only in its size, but also in its production capacity and its energy efficiency: is it one of the most profitable projects with the lowest CO emissions? in the world because it is electrified with renewable energy from the Norwegian electricity grid.
Its implementation allowed Norway will increase its crude oil production until it reaches two million barrels per day in some monthsan amount not seen since the ‘glorious days for Norwegian oil’ in the early part of the 2000s. Norway’s production had been slowing for several years due to the depletion of its large fields. Before Johan Sverdrup exploitation began, Norway was pumping between 1.2 and 1.4 million barrels.
The exploitation of oil and natural gas resources is vital for the Norwegian economy. In 2022, the country earned approximately $200 billion from the sale of oil and gas, which represents an important part of the country’s Gross Domestic Product (GDP). This income is largely managed through the Norwegian Government Pension Fund, which is the largest sovereign wealth fund in the world. This fund has assets that exceed 1.3 trillion dollars. Oil and, above all, good management in Norway have worked this kind of miracle that will allow several generations of Norwegians to live with living standards much higher than that of the rest of Europeans.
In conclusion, it can be said that Johan Sverdrup is not only a jewel of Norwegian oil production, but also a symbol of the strength of Norway’s energy industry, which remains a key player in supplying oil to Europe and in stabilizing the world market.
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