Norwegian oil and gas player Aker BP is planning to drill 13 exploration wells this year while also working to develop several projects in Norway, including a new Alvheim tieback for which the company has just received a green light.
These 13 exploration wells planned for 2022 have an estimated unrisked volume potential of around 250 mmboe net to the company.
For the current year, Aker BP plans an exploration spend of around $400 million and an abandonment spend of around $100 million. In 2021, the company’s exploration spend was over $433 million and over $245 million in 2020.
Meanwhile, the Norwegian Ministry of Petroleum and Energy has approved Aker BP’s plan for development and operation (PDO) for Kobra East & Gekko (KEG) project in the Alvheim area. The plan for the project, which is expected to help extend the life of the Alvheim field, was submitted to the authorities in late June 2021.
Total investments in the project are projected at around NOK 8 billion or about $1 billion and production is scheduled to start in the first quarter of 2024. Recoverable reserves in KEG are now estimated at around 50 million barrels of oil equivalents (mmboe).
The development comprises the two discoveries Kobra East and Gekko in licence 203. The field will be developed with subsea installations connected to the production vessel on the Alvheim field (Alvheim FPSO), which is located in the Norwegian part of the central North Sea near the UK border.
It is expected that CO2 emissions per barrel will be cut in half and oil production from the Alvheim FPSO will double when KEG comes on stream.
Aker BP sees profit growth
Aker BP on Wednesday also reported on its financial performance in the last quarter of 2021. The Norwegian company reported a total income of $1.85 billion compared to $1.6 billion in 3Q 2021 and $834 million in 4Q 2020.
Aker BP’s net profit was $364 million in 4Q 2021 compared to $206 million in 3Q 2021 and $129 million in 4Q 2020.
The company’s net production in the fourth quarter was 207 thousand barrels of oil equivalent per day (mboepd) compared to 210 mboepd. The decrease was mainly driven by lower production from the Alvheim area and Skarv , partly offset by higher production from the Valhall area compared to the previous quarter.
Total exploration spend in the fourth quarter was $95 million compared to $109 million in 3Q 2021, while $83 million, compared to $97 million in 3Q, was recognised as exploration expenses in the period, relating to dry well costs, seismic, area fees, field evaluation and G&G costs.
The company continued progressing its portfolio of field development projects according to plan and, during the fourth quarter, the development concept was decided for the NOAKA area development. In addition, development concepts were decided for Valhall NCP & King Lear and for Trine & Trell in the Alvheim area, and a PDO for Hanz in the Ivar Aasen area was submitted to the authorities.
Capital expenditure amounted to $442 million in 4Q 2021 versus $378 million in the prior quarter, mainly related to development projects at the Alvheim and Valhall areas.
It is worth reminding that Aker BP is in the process of merging with Lunding Energy ‘s oil and gas business and the process is expected to be completed around mid-2022.