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Released July 22, 2019 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Norway's oil and gas major Equinor (NYSE:EQNR) has bagged a larger slice of the giant Johan Sverdrup oil field in the North Sea following a deal with Lundin Petroleum AB.
Equinor is selling a 16% shareholding in Lundin Petroleum in exchange for a 2.6% share in the Johan Sverdrup field and a cash payment of around $650 million. This will increase Equinor's stake in the project to 42.6%. Johan Sverdrup, currently under construction, is the biggest field development on the Norwegian continental shelf since the 1980s. The first phase of the Johan Sverdrup development is almost 90% finished, and production is expected to start in November this year. The resource estimate for the entire Johan Sverdrup field stands at 2.2 billion to 3.2 billion barrels of oil equivalent (boe) with an expected estimate of 2.7 billion barrels. It will contribute up to 25% of Norway's total production of oil and gas and is ranked as one of the most important industrial projects in Norway for the next 50 years.
"Since 2016 we have more than doubled the value of our investment in Lundin," explained Eldar Sætre, president and chief executive officer of Equinor. "This transaction gives us the opportunity to capitalize on this value creation, and at the same time increase our direct ownership in the Johan Sverdrup field. "Johan Sverdrup is truly a world-class field. We are on track to start production in November this year, and an increased direct ownership share gives us the opportunity to create even more value for our shareholders."
The deal includes a contingent payment of up to $52 million payable to Lundin in 2025 if Johan Sverdrup proves to be at the upper end or above the indicated resource range of 2.2 billion to 3.2 billion barrels of oil equivalent.
Ian H. Lundin, chairman of Lundin Petroleum, commented: "The chance to redeem the majority of Equinor's holding in Lundin Petroleum at a discount to the market and before the pivotal start-up of the Johan Sverdrup development project in November this year was an opportunity which rarely comes along."
In May, Industrial Info reported that Norway's government had granted permission to Equinor for the $5 billion Johan Sverdrup Phase 2 oil and gas project. Phase 2 of the development, with planned startup in fourth-quarter 2022, will increase field production from 440,000 barrels of oil per day to 660,000 barrels per day. For additional information, see May 29, 2019, article - Norway Permits Phase 2 of Largest Oil and Gas Project. In April, the project achieved a record-breaking lift when four massive units weighing almost 47,000 tonnes were lifted into place offshore over a four-hour period. For additional information, see April 1, 2019, article - Equinor Completes Record-Breaking Lift on Johan Sverdrup.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
Equinor is selling a 16% shareholding in Lundin Petroleum in exchange for a 2.6% share in the Johan Sverdrup field and a cash payment of around $650 million. This will increase Equinor's stake in the project to 42.6%. Johan Sverdrup, currently under construction, is the biggest field development on the Norwegian continental shelf since the 1980s. The first phase of the Johan Sverdrup development is almost 90% finished, and production is expected to start in November this year. The resource estimate for the entire Johan Sverdrup field stands at 2.2 billion to 3.2 billion barrels of oil equivalent (boe) with an expected estimate of 2.7 billion barrels. It will contribute up to 25% of Norway's total production of oil and gas and is ranked as one of the most important industrial projects in Norway for the next 50 years.
"Since 2016 we have more than doubled the value of our investment in Lundin," explained Eldar Sætre, president and chief executive officer of Equinor. "This transaction gives us the opportunity to capitalize on this value creation, and at the same time increase our direct ownership in the Johan Sverdrup field. "Johan Sverdrup is truly a world-class field. We are on track to start production in November this year, and an increased direct ownership share gives us the opportunity to create even more value for our shareholders."
The deal includes a contingent payment of up to $52 million payable to Lundin in 2025 if Johan Sverdrup proves to be at the upper end or above the indicated resource range of 2.2 billion to 3.2 billion barrels of oil equivalent.
Ian H. Lundin, chairman of Lundin Petroleum, commented: "The chance to redeem the majority of Equinor's holding in Lundin Petroleum at a discount to the market and before the pivotal start-up of the Johan Sverdrup development project in November this year was an opportunity which rarely comes along."
In May, Industrial Info reported that Norway's government had granted permission to Equinor for the $5 billion Johan Sverdrup Phase 2 oil and gas project. Phase 2 of the development, with planned startup in fourth-quarter 2022, will increase field production from 440,000 barrels of oil per day to 660,000 barrels per day. For additional information, see May 29, 2019, article - Norway Permits Phase 2 of Largest Oil and Gas Project. In April, the project achieved a record-breaking lift when four massive units weighing almost 47,000 tonnes were lifted into place offshore over a four-hour period. For additional information, see April 1, 2019, article - Equinor Completes Record-Breaking Lift on Johan Sverdrup.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
