Aker BP earned $2.19 billion from operations

(E24) Aker BP presents stronger figures for the first quarter of the year than at the same time last year.

These are some of the key figures in Aker BP’s report for the first quarter:

• Aker BP had an operating profit of USD 2.19 billion (NOK 23.8 billion), up from USD 1.96 billion in the same quarter last year
• Analysts had expected operating profit of $2.07 billion, according to Bloomberg
• Profit after tax was 531 million dollars, up from 187 million dollars in the same quarter last year
• Revenue was $3.08 billion, down from $3.3 billion in the same quarter last year
• The company will pay $0.60 per share in dividend

– The first quarter is a solid quarter, in line with plan. Good production, continuing the trend with good cost discipline – a little helped by currency and some other effects, but also driven by the fact that we are still improving on underlying costs, says Aker BP CEO Karl Johnny Hersvik to E24.

He states in a message that the company’s many development projects are on track, and construction activity is picking up both in Norway and abroad. The company expects that the Tyrving field can be accelerated to start-up in the fourth quarter.

Produces close to 450,000 barrels per day

Aker BP has previously stated that production amounted to 448,000 barrels of oil equivalent per day in the first quarter, down from 452,700 barrels per day in the same quarter of the previous year.

The company received $82.7 a barrel for its oil, up from $78.4 a barrel in the same quarter last year.

Aker BP achieved a gas price equivalent to USD 51.4 a barrel in the first quarter, down from USD 98.7 a barrel in the first quarter of last year.

The largest owner in Aker BP is Kjell Inge Røkkes Aker, followed by BP. The Lundin family and Folketrygdfondet also have significant ownership.

The company was created when Røkkes Det norske oljeselskap bought BP’s Norwegian operations in 2016. Aker BP grew further when the company took over Lundin Energy’s Norwegian operations in 2022.

The Aker BP share is down 5.96 percent so far this year to NOK 277.90.

The state lost the trial

It created a lot of uncertainty when Greenpeace and Nature and Youth recently won a case against the state related to the proceedings around the Breidablikk, Tyrving and Yggdrasil fields.

The Oslo district court also issued a temporary injunction so that the state will temporarily not grant any new permits to the fields. Breidablikk is in production and has an operating license until the end of the year. Tyrving will be in production later this year, and Yggdrasil will be in production in a few years.

“Both the sentence and the temporary injunction have been appealed by the Norwegian state to the Borgarting Court of Appeal. On 20 March, the court decided to postpone the entry into force of the temporary injunction until the court has decided questions about security and the consideration of various interests”, writes Aker BP.

They believe that their development plans are still valid. Aker BP continues to monitor the situation, and the court’s decision to postpone the temporary injunction considerably reduces the risk for Yggdrasil, the company writes in its quarterly report.

Projects on track

Aker BP reports that engineering, procurement and fabrication are on track for the Valhall PWP-Fenris project. Work has begun on the equipment platform produced in Stavanger, the process module produced in Dubai and the undercarriage of PWP and the topside platform of Fenris in Verdal.

The giant Yggdrasil project is also on track, according to Aker BP.

The construction work employs thousands of people both in Norway and internationally. The engineering work now has the construction drawings as the most important priority. The first offshore campaign is underway in the area. The first subsea frames should be ready for installation this summer.

Will look at Wisting

Aker BP’s exploration program includes the Ferdinand and Hassel exploration wells east of the Wisting field in the Barents Sea in the second quarter. The investment decision on Wisting was postponed until 2026 in autumn 2022.

The Wisting oil project has been controversial among environmentalists and several parties, because it will produce oil long after 2050 and because it is located in a vulnerable area in the Barents Sea.

– I probably have faith that we will find hydrocarbons. What I am most excited about is whether it is gas or oil, and volume, says Hersvik.

– The whole background for drilling these prospects is to clarify whether there is actually a potential for Wisting. Of course, it is the case that discoveries in the immediate area will reduce the balance sheet price, or investments per barrel, he says.

He says that the two wells are not absolutely necessary for an investment decision at Wisting.

– But in the event of a discovery, in any case if there is some volume, they will give a lower balance price and thus a more solid decision-making basis.

Hanz is in production

On Monday, Aker BP announced that production has started on the Hanz field in the North Sea.

The field has cost approximately NOK five billion, and will produce approximately 20 million barrels of oil equivalent. It has been built out on the seabed and connected to the Ivar Aasen platform 15 kilometers to the south.

Hanz was discovered in 1997. Partners in the field are Equinor and Sval Energi.