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Major new North Sea development

December 15, 2006, 11:30 CET

Proposals for developing the Gjøa field in the North Sea have been submitted by development operator Statoil to the Ministry of Petroleum and Energy in Oslo today, 15 December.

This submission, which was unanimously agreed, includes a plan for development and operation (PDO) of the field itself and a plan for installation and operation (PIO) of associated pipelines.

The partners in the Gjøa licence want to produce Gjøa through subsea-completed wells tied back to a semi-submersible platform, with oil and gas production starting in 2010.

While the oil will be piped to Statoil’s Mongstad terminal north of Bergen through a tie-in to the Troll Oil Pipeline II, the gas will go via Britain’s Flags system to St Fergus in Scotland.

Electricity for the field installations will be largely supplied from land-based generating capacity.

Gjøa will be developed using technical solutions with which Statoil has gained good experience during its Kristin development in the Norwegian Sea.

This helps to make the development as secure as possible, in relation both to safety and to the environment.

“Gjøa opens a new area of the North Sea for oil and gas production,” says Terje Overvik, executive vice president for Exploration & Production Norway.

“I’m proud that we’ve found a development model for this field which satisfies our requirements for profitability.”

He notes that the discovery has been matured quickly and that the licensees have worked creatively to achieve profitability in what was initially a marginal project.

Examples of such innovative thinking include the use of existing infrastructure such as Troll Oil Pipeline II and the Flags system.

The PDO also calls for the Hydro-operated condensate and gas fields Vega and Vega South – to be tied back to the Gjøa platform.

These small discoveries are unlikely to justify an independent development, so the coordination benefits of this solution are substantial.

“Statoil's ambition is to produce a million barrels of oil equivalent per day from the NCS up to 2015,” says Mr Overvik.

“Gjøa will also make an important contribution in this context. In addition, the development will support further exploration and development in the area.”

The total investment in Gjøa is estimated to be in the region of NOK 27 billion in 2006 money, with the three Hydro-operated licences accounting for approximately NOK 1.9 billion of this.

Located in blocks 35/9 and 36/7, Gjøa was discovered in 1989 and lies about 70 kilometres north of Troll and 45 kilometres off the west Norwegian coast.

Its reserves are put at roughly 40 billion standard cubic metres of gas and about 83 million barrels of oil and condensate.

While Statoil is development operator for Gjøa, Gaz de France Norge will take over the operatorship once the field comes on stream.

The partners in the licence are Gaz de France Norge with 30%, Petoro 30%, Statoil 20%, Shell 12% and RWE Dea 8%.

Development is conditional on approval of the plans by the Norwegian authorities.