Overview of the Gjoa Subsea Project

Vaar Energy and its joint venture partners have sanctioned the development of three fields—Ofelia, Gjoa Nord, and Cerisa—as subsea tie-backs to the Gjoa hub in the Norwegian North Sea. The project, known as "Gjoa Subsea," involves nearly 80 million barrels of oil equivalent in proven plus probable reserves. The final investment decision coincided with the submission of a plan for development and operations to Norwegian authorities, with estimated capital costs of Nkr14 billion ($1.42 billion).

Production Timeline and Economics

First production is expected from Cerisa in the third quarter of 2027, followed by start-up from Ofelia and Gjoa Nord in the second half of 2028. The project boasts strong economics, with a breakeven below $35 per barrel of oil equivalent and a rate of return well above 25%. Subsea contractor TechnipFMC has previously indicated that the potential contract for this project is valued between $500 million and $1 billion.

Development Approach and Partnerships

Vaar has emphasized a "subsea project factory" approach as key to delivering its next batch of projects, all of which will be tie-backs to existing offshore platforms like Gjoa. This strategy relies on partnerships with leading services companies, including OneSubsea, Ocean Installer, Subsea7, Halliburton, and COSL.

Ownership Structure

• Ofelia (Block PL 929): Vaar (40%), Pandion Energy (now Vaar) (20%), Harbour Energy (20%), Aker BP (10%), DNO (10%).
• Gjoa Nord (Block PL 153): Vaar (40%), Petoro (30%), Harbour (28%), OKEA (12%).
• Cerisa (Block PL 636): Vaar (40%), Inpex (30%), Orlen (30%), DNO (10%).

Strategic Significance

The Gjoa Subsea Projects aim to develop core hubs through efficient tie-back developments, leveraging existing infrastructure and exploration success to create long-term value. This strengthens Gjoa as a long-term production hub and supports Vaar's target to produce more than 400,000 barrels of oil equivalent per day long-term. This is Vaar's second final investment decision in the past week, following the sanction of the latest development phase of the Balder project on 18 June.