Varg on stream
The Varg oil field in the Norwegian North Sea was put into production on the morning of 22 December by operator Saga Petroleum.
Statoil is a partner in this development, which lies in the Sleipner area. While initial output is expected to vary a good deal, the planned plateau flow is about 56,600 barrels of oil per day.
Varg has been developed with a ship tied to a wellhead platform. The vessel's production capacity corresponds to plateau output, and it can store 440,300 barrels.
Some uncertainty has attached to estimates of the field's reserves. Saga's latest update puts these at roughly 50 million barrels of recoverable oil.
Varg is expected to produce for three-four years, reports technical manager Arne G Brevik in Statoil's department for partner-operated licences. The development has cost roughly NOK 3.5 billion, including construction of the production ship.
Calculations by Saga indicate that the break-even oil price for the field will be USD 17 per barrel.
Delays in building the Varg ship at Keppel Far East Levingston Shipbuilding in Singapore mean that the field has come on stream seven months behind the original schedule. Saga has advertised the vessel for sale.
The operator has a 35 per cent interest in the field, while Statoil holds 65 per cent - including 30 per cent for the state's direct financial interest in offshore operations.