Equinor is deploying three world-class technologies to mitigate Johan Sverdrup’s decline rates, based on reviewing c115 of the company’s patents and dozens of technical papers. Our new 15-page note outlines how its efforts may unlock an incremental $3-5bn of value from the field, as production surprises to the upside.
Pages 2-3 provide the context of the Johan Sverdrup field, its implied decline rates and how their variability will determine the field’s ultimate value.
Page 4 re-caps the concept of decline rates and how they should be measured.
Pages 5-7 recount the history of Digital Twin technologies, the cutting edge of their application offshore Norway and evidence for Equinor’s edge, as it deploys the technology at Sverdrup.
Pages 8-11 illustrate the upside in Permanent Reservoir Monitoring, comparing Equinor’s plans versus prior achievements deploying the technology off Norway.
Page 12-14 show the cutting-edge technology that excites us most: combining two areas where Equinor has established a leading edge. This opportunity can improve well-level production rates by c1.5x.
Page 15 ends by touching upon other technologies that will be applied at Sverdrup, quantifying Equinor’s offshore patent filings versus other listed Majors’.
Global energy investment will need to rise by c$220-270bn per annum by 2025-30, according to the latest data from the IEA, which issued its ‘World Energy Investment’ report this week. We think the way to achieve this is via better energy technologies.
Specifically, the world invested $1.6bn in new energy supplies in 2018, which must be closer to $1.8-1.9bn, to meet future demand in 2025-30– whether emissions are tackled or not. The need for oil investment is most uncertain. More gas investment is needed in any scenario. And renewables investment must rise by 15-100%.
Hence the report strikes a cautious tone:“Current market and policy signals are not incentivising the major reallocation of capital to low-carbon power and efficiency that would align with a sustainable energy future. In the absence of such a shift, there is a growing possibility that investment in fuel supply will also fall short of what is needed to satisfy growing demand”.
We do not think the conclusions are surprising. Our work surveying 50 investors last year found that fears over the energy transition are elevating capital costs for conventional energy investments (below).
Meanwhile, low returns make it challenging to invest at scale in renewables.
We argue better energy technologies are the antidote to attracting capital back into the industry. That is why Thunder Said Energy focuses on the opportunities arising from energy technologies. Please see further details in our recent note, ‘What the Thunder Said’. For all our ‘Top Technologies’ in energy, please see here.
IEA (2019). World Energy Investment. International Energy Agency.
Energy transition is underway. Or more specifically, five energy transitions are underway at the same time. They include the rise of renewables, shale oil, digital technologies, environmental improvements and new forms of energy demand. This is our rationale for establishing a new research consultancy, Thunder Said Energy, at the nexus of energy-technology and energy-economics.
This 8-page report outlines the ‘four goals’ of Thunder Said Energy; and how we hope we can help your process…
Pages 2-5 show how disruptive energy technologies are re-shaping the world: We see potential for >20Mbpd of Permian production, for natural gas to treble, for ‘digital’ to double Oil Major FCF, and for the emergence of new, multi-billion dollar companies and sub-industries amidst the energy transition.
Page 6 shows how we are ‘scoring’ companies: to see who is embracing new technology most effectively, by analysing >1,000 patents and >400 technical papers so far.
Page 7 compiles quotes from around the industry, calling for a greater focus on technology.
Page 8 explains our research process, and upcoming publication plans.
In 2018, we reviewed 250-years of energy transitions, arguing that another great energy transition is now on hand.
It will occur over the next century. Thus for another hundred years, today’s energy industry will remain vitally important. In addition, new sources of supply will create unimaginable new sources of energy demand.