Aker BP Starts Construction for North Sea Projects in Norway

Aker BP ASA has begun construction for the Yggdrasil area project and the Valhall field extension project on the Norwegian side of the North Sea.

Yggdrasil contains several discoveries and holds around 650 million barrels of oil equivalent (MMboe) while the Valhall extension project targets an estimated 137 MMboe, according to the projects' descriptions on Aker BP's website. The extension project includes connecting the Fenris field to Valhall by a bridge, according to Aker BP. Both the Yggdrasil project and the Valhall extension project are targeted to start production 2027.

"Today, Aker BP celebrated the first official steel cut for its two major developments, Yggdrasil and Valhall PWP-Fenris on the Norwegian shelf", The independent exploration and production company said in a press release. "The event at Stord marks the start of three years of high activity and thousands of jobs at yards and suppliers throughout Norway".

Yggdrasil contains the Ost Frigg Beta/Epsilon wildcat well, a discovery that turned out to be the Nordic country's longest-ever exploration well, according to an Aker BP media release announcing the completion of drilling June 9.

"When the Ost Frigg Beta/Epsilon wildcat well reached its target depth, the team had drilled 8168 meters [26,797.9 feet]. As it made its way horizontally through the reservoir, the value of Yggdrasil increased meter by meter − in what is Norway’s longest ever exploration well”, Aker BP said in the June announcement.

Aker Solutions ASA has been tapped for the construction phase, and "more than 200 supplier companies in Norway are making direct contributions to the developments", Monday's announcement said.

"These development projects will contribute significant value creation and tax revenues for many years to come", Knut Sandvik, senior vice-president for projects at Aker BP, said in a statement. "They are also important for Aker BP because they help ensure that we can deliver on our ambition to create the oil and gas company of the future, with low costs, low emissions, profitable growth and attractive returns".

Yggdrasil is being developed with Equinor ASA and PGNiG Upstream Norway AS under three licenses, with Aker BP as the operator for the entire area. Meanwhile Valhall is a partnership between Aker BP and Pandion Energy AS while the Fenris field involves Aker BP and PGNiG.

More Gas for Europe

Sixty-five percent of output from the two development projects is meant for Norway, while the Valhall extension project also aims to boost gas exports to Europe, according to Aker BP.

"We are now also establishing Valhall as a gas hub. Production from Fenris will substantially increase gas export from Valhall to Europe and will more than double gas processing capacity”, senior vice-president for Valhall Ole Johan Molvig said in an Aker BP news release June 5 announcing parliamentary approval for the two projects.

Norway had been Europe’s biggest source of natural gas next to Russia before the latter invaded Ukraine February 2022. Imports by the European Union and the United Kingdom from Norway averaged nine billion cubic feet per day (Bcfpd) between 2010 and 2020, below Russia’s 2020 average of 13 Bcfpd “as development of new fields in the Barents Sea section of the Norwegian offshore Continental Shelf was insufficient to offset declines from mature fields in the North Sea”, the USA Energy Information Administration said in a report February 11, 2022.

Amid trade sanctions against the war launched by President Vladimir Putin, Norway overtook Russia as the EU’s top natural gas supplier 2022, accounting for 24.4 percent of the region’s imports compared to 15.3 percent from Russia, according to a bulletin update August 23 by the EU statistics agency Eurostat.

Further Construction on Norwegian Sea

The commencement of construction for the North Sea projects comes days after Aker BP also started construction for three discoveries in the Norwegian Sea.

Collectively known as the Skarv Satellite Project, the Alve Nord, Idun Nord and Orn fields comprise "the largest development in the Norwegian Sea in recent years", the company noted in a news release August 29 announcing the start of construction.

The project prolongs production on Skarv, which started up over 10 years ago, according to Aker BP. The satellite project is planned to start producing in the third quarter of 2027 with an expected recovery of 120 MMboe, mainly gas.

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