Var Energi ASA today provided an update on the progress for the Balder X development and a revised cost estimate which reflect increased scope of work, the continued impact from global supply chain challenges, Covid-19 and schedule change. The company’s production target of more than 350,000 boed by the end of 2025 is unaffected, according to the company's release.
Balder X, which comprises Balder Future and the Ringhorne Phase IV drilling projects, is set to extend production from the Balder Hub to 2045 and support development of new nearby discoveries by upgrading existing infrastructure and drilling of new wells. A baseline project review has identified additional gross investment requirements of USD 1.2 billion (NOK 11.5 billion), bringing the total estimated gross project cost to USD 4.3 billion (NOK 40.7 billion). First oil from Balder X is now expected in the third quarter of 2024, compared to previously late in 2023.
The new cost estimate and schedule change are mainly related to Balder Future, with increased scope and additional engineering and construction work on the Jotun FPSO lifetime extension. External factors including Covid-19, challenging weather conditions for drilling and offshore activities, and commodity and services price inflation have to some extent impacted the overall project. Key focus areas are to ensure progress and cost control for the remaining part of the project.
Balder X is expected to unlock an estimated 143 million barrels of recoverable reserves. Once the Jotun FPSO is re-installed and connected to the Balder Future production wells, it will tie in the new Ringhorne wells. Furthermore, the King and Prince discoveries announced in 2021, estimated to hold additional 60-135 million barrels of oil, are being considered for tie-ins to the Jotun FPSO. Var Energi is also evaluating new exploration prospects in the highly prolific Balder area.
The Balder X project aims to extend production to 2045 and consists of four ongoing projects: Balder FPU life extension - vessel upgrade, drilling new wells on Ringhorne III/IV and Balder Future including Jotun FPSO lifetime extension and drilling 14 new production wells and one water injection well.
Var Energi is one of the leading independent upstream oil and gas companies on the Norwegian continental shelf (NCS).