Vår Energi has made the final investment decision (FID) for the Balder Next New Wells project, an initiative that will promote the next stage of development of the Balder area in the North Sea and help sustain the company’s production for the next few years.
The project includes an initial phase with seven new wells that will be connected to the Jotun floating production, storage, and offloading (FPSO) unit. Commissioning is scheduled for the fourth quarter of 2027 and will allow for the addition of new reserves to the existing production system.
A development that expands the reserves in the Balder area
The initiative will develop approximately 86 million barrels of oil equivalent (MMboe) in proven and probable reserves. This figure exceeds the initial estimates communicated by the company at the beginning of the year, when the project envisioned around 75 MMboe.
The increase reflects the continuous optimization of development and the advancement of technical studies carried out by Vår Energi in the area.
According to the company, the project presents solid financial indicators, the break-even point is close to $30 per barrel of oil equivalent, while the internal rate of return exceeds 35%, factors that supported the approval of the investment.
The Jotun FPSO is strengthened as a strategic production center
The Jotun FPSO infrastructure plays a central role in Vår Energi’s growth strategy. Since it began operating, this facility has enabled the integration of new developments and the utilization of available capacity in the Balder area.
Likewise, the connection of the new wells will take advantage of existing facilities, which helps to reduce execution times and optimize costs associated with offshore development.
For Torger Rød, Chief Operating Officer of Vår Energi, the project demonstrates the company’s ability to execute high-quality developments while strengthening long-term value creation and maintaining production growth.
Sustainable production and infrastructure consolidation
The Balder area is one of the company’s main assets on the Norwegian continental shelf. The company believes this development will be crucial to supporting its goal of maintaining production above 400,000 barrels of oil equivalent per day in the long term.
Furthermore, the project will facilitate the consolidation of the production infrastructure in the area; among the planned measures is the start of the dismantling of the Balder floating production unit from 2028, an action aimed at reducing operating costs and emissions associated with operations.
A strategy based on efficiency and accelerated execution
Vår Energi will develop Balder Next New Wells using its project factory model, an approach that combines standardized solutions, pre-arranged agreements with suppliers, and strategic alliances to accelerate project execution.
The company seeks to leverage this methodology to reduce the time required between investment approval and the start of commercial production.
Vår Energi operates the Balder field with a 90% stake, while Kistos Energy Norway AS owns the remaining 10%.
Source and photo: Varenergi.no
