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Åsgard costs revised

March 29, 2000, 10:00 CEST

New estimates for Statoil's four developments in the Åsgard chain show that one project will cost a little more and the other three a little less.

These changes, which relate to the previous assessment in February, leave the overall investment forecast for the Norwegian Sea scheme at NOK 65,675 million.

A warning was given in February that the NOK 250 million in contingency funding for the Kårstø development project north of Stavanger would be consumed.

The cost increase now appears likely to total NOK 622 million, giving a final cost of NOK 10,350 million.

This rise largely reflects unforeseen expansion in the scope of system testing, reports Henrik Carlsen, executive vice president for Exploration & Production Norway.

"A number of defects and deficiencies have come to light during this work," he says. "Along with other conditions, that means productivity in the commissioning phase is lower than expected."

The new estimate reduces the cost of the Åsgard field development by NOK 277 million compared with the February estimate, when an increase for the B gas floater was forecast.

Spending on project management, the Åsgard A and C ships, subsea installations, risers, drilling and well completion has been cut in relation to earlier estimates.

The total expected bill for this part of the chain is thereby down from NOK 40,589 million to NOK 40,312 million.

Both Åsgard Transport and Europipe II look like being brought in more cheaply than expected, with cuts of NOK 104 million and NOK 180 million respectively from earlier estimates.

This means that the two gas trunklines will have cost NOK 7,865 million and NOK 6,900 million respectively.

Compared with the February estimate, these changes mean that the contingency element in the total budget has risen by NOK 189 million to NOK 848 million.

Mr Carlsen says that the principle challenges now facing the chain are to commission and start up the Kårstø facilities and Åsgard B on schedule.

Plans call for the floating platform to leave Stavanger for the field on 19 April, and to start delivering gas to continental Europe on 1 October.