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Lundin Petroleum (LUP:TSX) the 40% operator of the massive Johan Sverdrup oil field and their partners (40% Statoil, 20% Maersk Oil) have announced development plans.  Johan Sverdrup has between 1.8 to 2.9 billion barrels of gross recoverable contingent resources making it one of Norway's largest oil discoveries.  At full field production, the group expects gross production to peak at 550,000 to 650,000boe/d which would represent roughly 25 per cent of all Norwegian oil production.

The partners have finalized a phase 1 development plan which is expected to cost between $18 and $21 billion, including export and power.  Due to the size of the Johan Sverdrup discovery, the partners have decided to develop the 200 square kilometer field in phases.

The first phase will include the field centre for the four fixed platform installations and subsea installations.  This will include one processing platform, one riser platform, one wellhead platform with drilling facilities and one living quarter platform. The platforms, which will be installed in 120 metres of water, will be installed on steel jackets and will be bridge-linked.

Johan Sverdrup phase 1 will include four platforms (Image: Lundin Petroleum AB)

Johan Sverdrup phase 1 will include four platforms (Image: Lundin Petroleum AB)

This first phase of development is expected to start producing in late 2019 with gross production capacity of between 315 and 380,000boe/d (126-152,000boe/d net to Lundin Petroleum).  The partners expect that they will have 40-50 production and injection wells associated with phase 1  of which 11-17 will be drilled prior to first oil with a semi-submersible rig.

Oil and gas from the Johan Sverdrup field will be transported to shore by one 274km, 36-inch oil pipline which will connect to the Mongstand terminal and one 165km 18-inch gas pipeline will connect the field to the Karsto gas terminal.  This is expected to cost approximately $2 billion.

Ashley Heppenstall, President and CEO of Lundin Petroleum, comments: "Following the discovery of the Johan Sverdrup field by Lundin Petroleum in 2010 the concept selection decision is a major milestone for Lundin Petroleum, our Johan Sverdrup partners and the Norwegian society. The development of this field will be one of the largest project undertakings in the North Sea since the 1980s. The quality, size and location of this field are a unique combination, and as a result we believe it will create significant value for all stakeholders. It is often quoted in the oil industry that big oil fields get bigger and we certainly believe that this will be the case for Johan Sverdrup. On the Norwegian Continental Shelf a number of the larger mature fields are achieving recovery factors at or exceeding 70 per cent and it will be the objective to achieve similar results for Johan Sverdrup."

Lundin Petroleum will hold a conference call today, Thursday, Feb. 13, 2014, at 11 a.m. CET (10 a.m. GMT), where Mr. Heppenstall will comment.

To listen to the presentation and participate in the questions and answer session, please dial one of the following numbers.

Sweden:   46-8-505-564-74

International:   44-203-364-5374

International toll-free number:   1-855-753-2230

Read: Development Concept Selection Is Agreed for the Giant Johan Sverdrup Field