The Operator of the Balder X project, Vår Energi ASA, has today provided an update on the progress for the Balder X development and a revised cost estimate which reflect increased scope of work, the continued impact from global supply chain challenges, Covid-19 and schedule change.
Balder X, which comprises Balder Future and the Ringhorne Phase IV drilling projects, is set to extend production from the Balder Hub to 2045 and support development of new nearby discoveries by upgrading existing infrastructure and drilling of new wells. A baseline project review has identified additional gross investment requirements of NOK 11.5 billion, bringing the total estimated gross project cost to NOK 40.7 billion. Mime Petroleum AS holds a 10% stake in the Balder X project. First oil from Balder X is now expected in the third quarter of 2024, compared to previously late in 2023.
The main production impact from the revised schedule is expected in 2024, however partly mitigated by a faster ramp-up of production as more Balder Future production wells are expected to be ready for start-up. It is also expected that the majority of incremental capital expenditure will be incurred in 2024.
The new cost estimate and schedule change are mainly related to Balder Future, with increased scope and additional engineering and construction work on the Jotun FPSO lifetime extension. External factors including Covid-19, challenging weather conditions for drilling and offshore activities, and commodity and services price inflation have to some extent impacted the overall project. Key focus areas are to ensure progress and cost control for the remaining part of the project.
Balder X is expected to unlock an estimated 143 million barrels of recoverable reserves, and remains a highly profitable project which is expected to increase the Balder Hub gross production to over 70,000 barrels of oil equivalents per day at peak.
The revised cost estimate and schedule will be included in Norway’s National Budget for 2023 to be published 6 October 2022.
Reference is also made to the press release from Vår Energi ASA.
The Balder X Project
- The Balder field is in production license PL 001 – the very first license on the Norwegian Continental Shelf (NCS) – acquired in 1965.
- The Balder X project aims to extend production to 2045 and consists of four ongoing projects: Balder FPU life extension – vessel upgrade, drilling new wells on Ringhorne III/IV and Balder Future including Jotun FPSO lifetime extension and drilling 14 new production wells and one water injection well.
- The project is reusing existing infrastructure to reduce the development footprint and to open for a potential future retirement of production assets which may reduce annual CO2 emission ~100,000 ton per year.
- King and Prince discoveries in the Balder area, estimated to hold 60-135 million barrels of oil, are currently assessed for tie-ins to the Jotun FPSO.
- License owners: Vår Energi ASA 90% and Mime Petroleum AS 10%
For more information, please contact:
Olav Haugland
CFO
+47 915 41 809
or
Sverre Skogen
Executive Chairman
+47 971 62 010