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Awarding drilling contract in Algeria

January 10, 2006, 15:00 CET

Statoil has secured two rigs for exploration drilling on land in Algeria. Plans call for drilling of the group's first exploration well on the Statoil-operated Hassi Mouina block to begin in the summer.

The contracts with Nabors Drilling and Enafors have a combined value of about NOK 210 million (USD 32 million). The contract period lasts until March 2008 with opportunities for extension. Awarding the contracts is dependent on sanctioning by the Hassi Mouina partners.

Nabors Drilling's Rig 284 has a planned start-up in the second or third quarter of this year, while Enafor's rig ENF 39 will start drilling in the fourth quarter.

Hassi Mouina is Statoil's first ever operatorship on land.

"It is very positive that we get the rigs in place, to secure continued good progress in exploration in Hassi Mouina," says Terje Martin Halmø, country manager in Algeria.

"This is the first time Statoil is in the market for land rigs. It is a tight market, so we are very gratified that the contracts are in place.

"Statoil has not entered into contracts with these rig contractors previously. Health, safety and the environment have been very important criteria in awarding the contract."

Statoil has a 75 per cent share in the block and Algerian national oil and gas company, Sonatrach, has 25 per cent. Sonatrach has previously drilled one well which proved to contain hydrocarbons in Hassi Mouina.

Hassi Mouina lies north-west of the In Salah field where Statoil has a 31.85 per cent interest. Statoil also has a 50 per cent share in the In Amenas gas and condensate field.

Statoil has made a commitment to gather 400 kilometres of 2D-seismic and to drill two wells in the block but has plans to drill more. The area of the licence is about 23,000 square kilometres.