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Snøhvit approved

March 7, 2002, 20:30 CET

The plan for development and operation (PDO) of Statoil’s Snøhvit field in the Barents Sea was approved today, 7 March, by the Norwegian Storting (parliament).

A green light was also given by legislators to the plan for installation and operation (PIO) of the associated land-based gas liquefaction plant at Melkøya near Hammerfest in northern Norway.

"We are very pleased that this development has received the go-ahead,” says Henrik Carlsen, executive vice president for Exploration & Production Norway.

“Producing these reserves will generate substantial revenues for us in the longer term. And this approval means a further increase in our booked reserves.”

The Snøhvit gas and condensate field represents the first offshore development in the Barents Sea, and the first project in Europe based on gas liquefaction.

Producing liquefied natural gas (LNG) opens a new and forward-looking commercial opportunity for Statoil, and will supplement its existing gas expertise.

The project will have substantial economic spin-offs in northern Norway. It includes a subsea development tied back by pipeline to the receiving terminal and liquefaction plant at Melkøya.

LNG will be exported in specialised ships to terminals in the USA and southern Europe.

The development is costed at NOK 40 billion, excluding the LNG carriers. Plans call for work to begin in the near future, with production starting in 2006 and lasting until about 2030.

Jobs at Melkøya in the construction phase are expected to total up to 1,200 work-years. Operation of the land-based facilities will require some 180 permanent employees drawn from the local area.

Statoil and its partners in the Snøhvit field will now assess whether any of the conditions in the Storting’s approval need to be clarified before they take a final decision on development.

While Statoil has a 22.29 per cent interest in the field, Petoro has 30 per cent, TotalFinaElf 18.4 per cent, Gaz de France 12 per cent, Norsk Hydro 10 per cent, Amerada Hess 3.26 per cent, RWE-DEA 2.81 per cent and Svenska Petroleum 1.24 per cent.