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Hydro signs Grane production drilling deal

April 20, 2001, 01:00 CEST

Norsk Hydro has signed a letter of intent with Odfjell Drilling Management AS regarding the contract award for production drilling on the Hydro-operated Grane oil field in the Norwegian sector of the North Sea. The final contract will be signed in the near future.

The contract is valued at some NOK 430 million (USD 48 million) and will last until mid-2008 with an additional four-year option.

The Grane field, which lies some 185 kilometers west of Stavanger, Norway, will be developed with an integrated accomodation, processing and drilling platform on a steel jacket. Combined development investments total some NOK 15 billion (USD 1.7 billion).

The field is estimated to contain some 700 million barrels of recoverable oil, making Grane the largest proven oil field in Norway that has not yet been developed. The field is expected to reach a maximum daily production rate of 214,000 barrels per day in 2005. The oil will be transported from the field by pipeline to the land-based Sture terminal.

Hydro's equity share in Grane is 24.4 percent. Other shareholders include Statoil (6.4 percent), the state's direct financial interest (43.6 percent) and ExxonMobil (25.6 percent).

Hydro has already awarded the following contracts in connection with the Grane field development:

27/04/00: Marine installations, Heerema Marine Contractors Nederland B.V., NOK120 million.
16/05/00: Production module, Kværner Oil and Gas, NOK 3.5 billion.
05/09/00: Accomodation platform lease, Safe Service AS, NOK 200 million.
11/10/00: Drilling module, Aker Maritime, NOK 1 billion.
31/11/00: Steel jacket, Aker Verdal, NOK 670 million.
12/12/00: Oil export pipeline to land, Veidekke ASA and Murphy Pipelines Ltd., NOK 140 million.
24/01/01: Purchase of steel pipe, Europipe GmbH and Mitsui & Co. Norway AS, NOK 275 million.
02/03/01: Power generation module and accomodations quarters, Kværner Oil and Gas, NOK 500 million.
15/04/01: Offshore pipeline installation, European Marine Contractor (EMC), NOK 400 million.