Vår Energi’s Ambitious Production Plans for 2025
Norwegian oil and gas company Vår Energi has announced that it plans to launch four significant projects within this year, which will push its production capacity beyond 400,000 barrels of oil equivalent per day (kboepd). The company is positioning itself for a substantial increase in output in the fourth quarter of 2025, projecting production levels to exceed 400 kboepd, primarily driven by these project initiations. For the entirety of 2025, Vår Energi anticipates its production will be between 330 and 360 kboepd. Looking ahead, the company aims to maintain production levels around 400 kboepd in 2026 and sustainably keep output between 350 and 400 kboepd through 2030.
Cost Efficiency and Future Investments
Vår Energi expects that high-value barrels will help reduce production expenses to roughly $10 per barrel of oil equivalent (boe) by the fourth quarter of 2025. For the full year of 2025, the company has set its production cost guidance between $11 and $12 per boe. In 2025, Vår Energi plans to initiate nine projects, which are expected to contribute an additional 180 kboepd at peak production. The capital expenditure (capex) for this year is anticipated to be in the range of $2.3 to $2.5 billion, with an average annual capex of $2 to $2.5 billion projected through 2030.
Exploration and Resource Development Plans
Vår Energi has emphasized its robust resource base, boasting over 2.1 billion barrels of net proved plus probable (2P) reserves and 2C resources. The company aims to advance more than 25 early-phase projects, with a goal of exceeding 500 million boe net 2C contingent resources and sanctioning around eight new development projects this year. The firm is also committed to exploration activities on the Norwegian Continental Shelf (NCS), increasing its efforts to approximately 20 wells and allocating around $350 million for exploration costs. Approximately half of these wells are expected to be drilled within the next four years, prompted by a recent hydrocarbon discovery. Additionally, Vår Energi is focused on reducing its Scope 1 operational emissions by over 50% by 2030, striving for carbon neutrality in its net equity operational emissions by that same year through strategic investments in natural carbon capture offsets.
CEO’s Vision for Growth and Sustainability
Nick Walker, the Chief Executive Officer of Vår Energi, remarked, “The year 2025 is pivotal for Vår Energi, as production is set to surpass 400 kboepd in the fourth quarter and stabilize around that figure in 2026. By 2030, we are committed to organically maintaining production levels between 350 and 400 kboepd, leveraging the potential value of our high-quality assets that hold over 3 billion barrels of net resource potential. To achieve this, we are increasing the pace of operations, advancing over 25 early-phase projects, with ambitions to sanction up to eight projects in 2025. Moreover, we are intensifying infill drilling and exploration activities, all while aiming for carbon neutrality in our operational emissions by the end of this decade.”
Project Execution and Recent Discoveries
Progress is being made on the Equinor-operated Johan Castberg and Halten East projects, both expected to come online in the first quarter of 2025, alongside Vår Energi’s FPSO Jotun at Balder, which is slated to begin operations by the end of the second quarter of 2025. Equinor has already anchored the FPSO for the Johan Castberg project to the seabed with mooring lines in 2024. Vår Energi has also confirmed that it is moving forward on various projects, including sanctioning Balder Phase V in the fourth quarter of 2024, aiming for a late 2025 start-up. The company made six discoveries in 2024, achieving nearly a 50% success rate in exploration for the year. Drilling is set to commence in the first half of 2025 and conclude in 2026, with the first wells expected to be operational by the end of 2025 through subsea connections to the FPSO Jotun. The Balder field, where Vår Energi holds a 90% operating interest alongside partner Kistos Energy Norway (10%), is part of the Balder Future redevelopment project, which aims to extend production in the area until 2045 by targeting an additional recovery of about 200 million barrels of reserves.
