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New contracts awarded for advanced well steering

April 30, 2007, 16:00 CEST

Hydro has awarded three framework agreements for deliveries of equipment and services for advanced well steering on the Hydro-operated fields Troll, Grane, Oseberg and Brage in the North Sea. The contracts have a total value of around NOK 700 million, including options.

The contracts have been awarded to the oil service companies WellDynamics, Schlumberger and Baker Oil Tools, three companies that are well-established on the Norwegian continental shelf, with substantial competence and experience within services of this kind.

The deliveries include advanced steering of multilateral wells, as well as steering of single bore wells that cover several zones. Advanced wells of this kind are often referred to as "smart wells", and they provide opportunities for increased reservoir control. Hydro has gained experience with advanced zone steering on Troll, and this technology is expected to be adopted for all Hydro fields in the future.

Hydro is a world leader within multilateral well technology, and this technology has proved a great success for Hydro and its partners on the Troll field, where Hydro has drilled wells with as many as six branches. The new technology for steering branches will, in addition, enable the company to steer the well stream from the individual branches within a single well.

WellDynamics was granted a framework agreement covering the fields Grane, Oseberg and Brage. Including options, the contract has a value of around NOK 540 million.

Schlumberger and Baker Oil Tools were given parallel framework agreements for the Troll field, with a total value of NOK 115 million. However, Hydro expects that deliveries on Troll can increase significantly, depending on the development with additional installations.

The rest of the total contract value is connected to deliveries to smaller fields. The contracts will be implemented immediately, and have a two-year duration, with options of six years' extension.

"This is extremely important technology for the Norwegian continental shelf, and for maintaining production levels in the years ahead," stresses Ivar Brandvold, outgoing Senior Vice President for Hydro's Drilling unit.