Norwegian oil and gas firm OKEA will carry out maintenance works on its Draugen platform earlier than initially planned, following the Norwegian government's decision in April to cut oil production to support oil prices.
OKEA's Draugen field in the Norwegian Sea, in production since 1993, has been included in the list of offshore oil fields expected to reduce output in 2020. See the full list here.
For OKEA, the main impact relates to the Draugen field, as the Gjøa field where it owns a 12% working interest is exempted from the production curbs.
Approved production volumes for Draugen (44.56% WI) for June and H2-20 have been reduced from a total of 3.63 million bbls to a total of 3.43 million bbls.
"In order to re-optimize the operation and production at Draugen, the license has decided to move the bi-annual maintenance shutdown from September to late June," OKEA said.
On this basis, OKEA maintains the production guidance for 2020 of 14,000 – 15,000 boepd on average for the year.
"The revised shutdown schedule results in a postponement of an OKEA lifting which was previously planned for June to August which, due to revenue from sale of petroleum products being recognized in the financial statements at lifting, will increase the risk of a breach in bond covenants for Q2 2020," OKEA said.
"OKEA is currently in dialogue with bondholders in OKEA02 and OKEA03 to discuss terms of a temporary waiver. The Company is also monitoring the progress of the Norwegian Government’s proposed temporary changes to the petroleum tax regime, which may have a material positive liquidity effect for OKEA," it said.
OKEA acquired its interests in the Draugen and Gjøa offshore fields in Norway for 4.52 Billion NOK (US$526 million) from Shell in 2018.