Kjell Inge Røkke’s Aker BP oil company, which will soon be the largest private player on the Norwegian shelf as a result of the acquisition of Lundin Energy, will operate the entire Noaka project in the North Sea. In an announcement to the stock exchange on Thursday.
The development consists of several fields, and is one of the largest and most important remaining oil projects on the Norwegian shelf. It will also be the most important project that Aker BP has led from discoveries to production since the company’s inception through several transactions in recent years.
Aker BP has so far shared operator responsibility for the project with Equinor, which is a partial owner of several fields. Noaka includes the area north of the Alvheim field, as well as Fulla and Krafla. Equinor is currently the operator of the latter, but the two companies agree that the most efficient solution to developing and operating the fields is a single operator.
Today’s agreement is the result of good cooperation in recent years, built on mutual trust and a shared ambition to create lasting improvements and efficient operations on the Norwegian shelf, says Geir Tongsvik, Equinor’s Executive Vice President Projects, Drilling and Procurement in a report.
Aker BP and Equinor have worked well together in recent years on the development of Noaka. We are proud of our ability to take over the operation of Krafla, to ensure effective project execution and the operation of the entire area on behalf of the licenses,” says Karl Johnny Hersvik, CEO of Aker BP, CEO of Aker BP.
Former combat cocks
The good cooperation atmosphere that the company’s leaders emphasized in the report was not always a natural thing.
It’s been a stormy relationship for a long time when it comes to this particular project. For years, they have been in almost open conflict with each other over which development solution to choose.
But then something happened: Just days after the controversial oil tax package was adopted by the Norwegian parliament in June 2020, to support the industry through the pandemic, the former fighting cocks announced that they had reached an agreement on the project.
The letter of intent between Aker BP and Equinor on the operator comes just weeks before Aker BP took the step to its undisputed position as the second largest oil company on the Norwegian continental shelf, having just been defeated by state giant Equinor. The acquisition of Lundin’s Norwegian operations will give Aker BP a production of more than 400,000 barrels of oil equivalent per day, roughly ten percent of Norway’s total production. The deal is scheduled to close on June 30.
No transaction in Noaka
Noaka is by far Aker BP’s largest project, and the latest estimate is about ten billion dollars in investment, or about 93 billion kroner at today’s exchange rate. Last year, resource estimates were upgraded from 500 million to 600 million barrels of oil equivalent.
The Noaka area will be developed with power from the ground, and production is scheduled to begin in 2027.
The development and operation plan will be submitted this year, in order to meet the deadline for the oil tax package. This means significant tax advantages for projects that gain government approval by the end of 2023.
The transfer of the operator is only made upon delivery of this plan, and does not include any inter-company transaction, as Equinor retains its interests in various areas. They are as follows: (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
- Caravan: Equinor 50%, Aker BP 50
- Fulla: Aker BP 47.7, Equinor 40, Lotos 12.3
- Noah (North Alfheim): Aker BP 87.7, Lotos 12.3
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