Aker BP Foresees Output Doubling by 2023

Norwegian upstream independent Aker BP expects to maintain net production into 2018 and says it has the potential to double it by 2023.

Aker BP told a Capital Markets Day January 15 that its pro-forma production in 2017 was 160,000 barrels of oil equivalent/day (boe/d) – 80% oil and 20% gas – inclusive of the $2bn Hess Norway  acquisition completed December 22 2017. It expects 2018 production to be 155-160,000 boe/d, with an average production cost of $12/boe, and says its current portfolio means Aker BP has “the potential to produce 330,000 boe/d in 2023” (from sanctioned and non-sanctioned projects), implying a compound average growth rate of 13%. It increased reserves (2P) by a net of 202mn boe in 2017, to 913mn boe.

The company plans investments of some $1.3bn in 2018, of which exploration ($350mn) and decommissioning ($350mn) – the latter being higher because of the increased Valhall field ownership. Its interest in the Valhall and Hod fields rose to 90%, with the Hess deal. This time last year, Aker BP planned investment of some $900mn-$950mn in 2017, albeit for a smaller asset base.

Aker BP also aims to discover a net of 250mn boe oil and gas in the 2016 -2020 period, and drill 12 exploration wells in 2018.  It submitted three Plans for Development and Operation (PDOs) to the Norwegian petroleum ministry in 2017: for the Aerfugl gasfield (for first gas in 2020) and also Valhall Flank West and Skogul oil fields. It counts Polish state-run PGNiG among partners in both Aerfugl and Skogul.

"We are well positioned for further growth,” said Aker BP CEO Karl Johnny Hersvik, signalling that it would increase dividends for 2018 to $450mn. Net debt was $3.2bn at the end of 2017.