Norway’s huge Johan Sverdrup oil field isn’t due to start producing until November, but the oil may start gushing sooner than that. State oil company Equinor has confirmed that it’s alerted shipping firms that they “can expect oil volumes from Johan Sverdrup in the near future.”
Newspaper Dagens Næringsliv (DN) reported how Oslo brokerage house Pareto also has alerted the market that oil production from Sverdrup will probably commence in early October. The oil market is watching developments closely, simply because production can be so large.
Equinor spokesman Morten Eek told DN that it had sent out a so-called program overview to those owning and operating tankers in the market. “When we’re talking about such a large oil field, there will be large oil volumes,” Eek said. In order to arrange for “good logistics around this,” Eek added, “we’ve included volumes from Johan Sverdrup already from October.”
The idea is simply to be prepared in case production can start early, “but we expect start-up in November as earlier communicated.”
Sverdrup is likely to produce as much as 660,000 barrels of oil a day when its first two phases of construction are finished. That amounts to a quarter of Norway’s total oil production. The prospective shipping needs sent out by Equinor indicate that Sverdrup will deliver around 400,000 barrels of oil a day as early as October.
With so much new oil flowing into the market, oil prices may drop, according to some analysts. An early start-up would be positive for all the partners controlling Sverrup, while at the same time putting pressure on oil prices iin the short term,” wrote analyst Nadia Martin Wiggen in a message to DN. That’s because Sverdrup’s oil will be competing with other North Sea producers that set Brent crude prices.