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Costs up for Åsgard B

February 24, 2000, 12:00 CET

The cost of Statoil's Åsgard B gas platform is rising but remains within the overall investment framework set last year, the latest figures show.

Gas deliveries from the platform are still due to begin on 1 October. And total spending in the "Åsgard chain" of projects continues to lie below the ceiling of NOK 65,675 million.

These conclusions emerge from the latest six-monthly update of forecasts for the development. In addition to the Norwegian Sea field, this embraces construction at the Kårstø complex north of Stavanger and laying of the Åsgard Transport and Europipe II trunklines.

"We're now in a phase which covers the bulk of testing and mechanical completion for equipment and systems," reports Henrik Carlsen, executive vice president for Exploration & Production Norway.

"Work since mid-December reveals that it has not been possible to attain the forecast improvements in productivity and system completion."

System tests have exposed more extensive deficiencies and faults than expected, leading in turn to an increase in hours worked during January on Åsgard B and the Kårstø development project (KUP).

The estimated total cost of the B floater has been raised from last October's figure of NOK 11,414 million to NOK 12,180 million.

Although no detailed review of the KUP cost estimate has yet been carried out, the signs are that the NOK 250 million reserve built into this calculation will be consumed.

Final costs for the two trunkline projects are expected to be within budget.

Earlier estimates from Statoil have taken account of uncertainties relating to the completion of the Åsgard development, and accordingly incorporate a reserve.

Allowing for this, work on the field itself is expected to lie within the updated ceiling of NOK 40,743 million for project management, the A, B and C installations, risers, subsea facilities and drilling.