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Cooperation with Wintershall in Libya

July 19, 2004, 11:00 CEST

Hydro has signed a cooperation agreement with the German energy company Wintershall AG on exploration of oil and gas in Libya. The two companies also intend to cooperate on exploration in parts of the Norwegian continental shelf.

The agreement with Wintershall covers exploration, development and production of any oil and gas discoveries in Libya.

"This cooperation positions Hydro for future growth in this important oil and gas province. According to the agreement, Hydro will be operator in the operations phase if commercial discoveries are made offshore of Libya. Wintershall will be operator of any discoveries onshore," explains Kjetil B. Solbrække, head of Business Development in Hydro Oil & Energy.

The partners are also considering exploration prospects off the Mediterranean coast of Libya, and in the Sirte basin east of Tripoli.

To begin with, the cooperation will involve joint applications in the EPSA-4 (exploration and production-sharing agreement) licensing round for exploration areas in Libya.

"Hydro has considered various projects in North Africa over the last six months. This agreement is the result of this work, and could lead to a significant increase in our activities in Libya. Alongside this agreement, we will also continue to cooperate with our partners in the Mabruk and Murzuk fields," says Solbrække.

Exploration cooperation in Norway
Solbrække points out that Hydro will also sign an agreement with Wintershall on exploration in the Norwegian continental shelf.

"We hope to sign a similar agreement covering the Norwegian continental shelf. Hydro will still carry out independent exploration activities, but cooperation with Wintershall may be of interest in connection with the exploration applications for the 19th licensing round and in the predefined offshore areas," he says.

Hydro and Wintershall have already worked together indirectly through the joint venture company HydroWingas, which markets gas in the British market. Hydro owns one half this company, while Wingas, of which Wintershall owns 65 percent and Gazprom 35 percent, owns the other half.

"Our experiences with this company have shown that Wintershall is a good partner. The agreement we have signed applies for 2004 and 2005. It will also be possible to extend the agreement for as long as both companies are interested," says Solbrække.