Tromsø Patch deal

April 9, 1999, 01:00 CEST

The operatorship for all licences covering three gas fields off northern Norway will be vested in Statoil as part of a licence swap with Norsk Hydro.

This deal between the two companies involves an exchange of interests in licences embracing Snøhvit, Albatross and Askeladden on the Tromsø Patch in the Barents Sea and the Grane discovery in the North Sea.

Under the agreement, Statoil's interest in the Tromsø Patch acreage will be increased from 29 to 35 per cent, while its holding in Grane - which lies east of Esso's Balder development - goes down from 8.4 to 6.4 per cent.

These transactions will leave Hydro with an average of 10 per cent in the Tromsø Patch licences and 24.4 per cent of Grane.

Also taking over the operatorship for two of the licences covered by Snøhvit puts Statoil in the driving seat for a unitised Tromsø Patch development.

"This deal means we'll operate what could be Norway's first offshore development based on exporting gas in liquefied form by tanker," says Statoil chief negotiator Thomas Ladsten.

"That could secure access for Norwegian gas to new markets which are currently beyond the reach of our pipeline systems."

The agreement puts Statoil in charge of development work, and talks between the partners on a Tromsø Patch unitisation deal are to resume. Schedule and budget will be discussed next week, reports Mr Ladsten.

This reflects a recognition by the partners that Snøhvit is a demanding project, which is best handled by a single operator.

Combined with a desire to increase its holding in Grane, Hydro has found it appropriate to transfer its operatorships covering the Snøhvit area.

The transaction is in line with Hydro's desire to achieve a stronger concentration of its Norwegian offshore operations.

Other companies with interests in the area are Total/Fina, the next largest licensee with 17 per cent, as well as Amerada Hess, RWE-DEA Norge and Svenska Petroleum.

Proven gas reserves on the Tromsø Patch are put at 316 billion cubic metres. Snøhvit also contains condensate and oil, but the latter is not regarded as economically recoverable.