Equinor increases its ownership in the Statfjord field

Source: press release, 8 December 2021

The Statfjord A platform in the North Sea (photo: Equinor ASA/Harald Pettersen)
The Statfjord A platform in the North Sea (photo: Equinor ASA/Harald Pettersen)

Equinor has entered into an agreement to acquire all of Spirit Energy’s production licenses in the Statfjord area which spreads across the Norwegian and UK Continental Shelves and are developed by three integrated production platforms (Statfjord A, B, C). All licenses are operated by Equinor.

Both parties agreed on a total consideration of USD 50 million, plus a contingent payment linked to commodity prices for the period between October 2021 to December 2022 [1].

The transaction has a commercial effective date from 1 January 2021, which is expected to result in a net payment to Equinor at closing. Spirit Energy’s daily production from the Statfjord area in the third quarter of 2021 was around 21,000 boe per day.

The transaction is part of a larger deal including Spirit Energy’s shareholders, Centrica Plc and Stadtwerke München, who are exiting their portfolio in Norway and selling their assets to Sval Energi. The sale to Sval Energi includes all assets with the exclusion of Statfjord which is instead sold directly to Equinor.

“Statfjord is one of the earliest oil fields on the Norwegian Continental Shelf. In 2019, we celebrated the 40-year anniversary since the start of production in 1979. Since production start in 1979, Statfjord has produced 5.1 billion barrels of oil equivalent and gross revenues of over NOK 1,675 billion. We still have high expectations for Statfjord and have recently launched a plan to extend the life of the field towards 2040,” says Camilla Salthe, senior vice president for late life assets in Equinor (Field Life eXtension, FLX).

FLX is a unit within Equinor that is responsible for safe and efficient operations of late life assets through new ways of working.

Reducing CO2 emissions will be a key priority for the field. Towards 2030, Equinor plans to realise energy efficiency measures and consolidate infrastructure to reduce emissions from Statfjord by 50%, contributing to Equinor’s climate goals for the NCS.

The closing of the transaction is subject to certain conditions, including customary government approval, and is expected to be completed by the first half of 2022.

[1] The contingent consideration is offered through a payment structure linked to UK NBP gas prices. The duration of the contingent sharing structure is from 5 October 2021 until 31 December 2022, and the after-tax cashflow from actual production exceeding a floor price is assumed split 50% to the seller and 50% to the buyer (with one payment in respect of 2021 and one payment in respect of 2022). The gas floor price from 5 October 2021 until and including 31 December 2021 is 145.8 p/therm and from 1 January 2022 until and including 31 December 2022 is 96.9 p/therm.