Marathon's Alvheim oil field begins production

Marathon Petroleum Norge AS has begun producing oil from Alvheim field off Norway via its floating production, storage, and offloading vessel.

Uchenna Izundu
International Editor

LONDON, June 11 -- Marathon Petroleum Norge AS has begun producing oil from Alvheim field off Norway via its floating production, storage, and offloading vessel. It expects to increase output with a third development later this year.

Alvheim and Vilje fields are expected to ramp up production to 75,000 boe/d by early next year from a reserves base estimated at 250 million boe. Six wells have been drilled and completed on production licenses 203 (PL230), 088BS, and 036C on the Norwegian continental shelf.

Volund is a satellite scheduled to start production in the second half of 2009 on nearby PL150. Marathon operates Volund with a 65% stake, and its partner Lundin Norway AS has a 35% interest.

Plans originally called for Alvheim to come on stream by yearend 2007, but production was delayed because of the tight supply market for oil equipment. It is a significant asset for Marathon and Norway. The company spent $1.2 billion developing the project, which lies 224 km from Stavanger in 125 m of water. The Alvheim purpose-designed FPSO vessel has a design capacity of 120,000 b/d of oil and 125 MMcfd of natural gas with storage capacity of 560,000 bbl of oil.

Marathon will send gas to the existing UK SAGE system using a new 38 km cross-border pipeline. "The Alvheim FPSO will serve as a central hub in the area," the company said. "The nearby Vilje field is already tied back to Alvheim. As a regional hub, the Alvheim FPSO is well positioned to deliver significant production for the long-term."

Marathon's partners in the Alvheim development are ConocoPhillips Skandinavia AS with a 20% working interest, and Lundin Norway AS, with a 15% stake. Ashley Heppenstall, president and chief executive of Lundin Petroleum, said its production would increase the company's output by 50%.

Contact Uchenna Izundu at uchennai@pennwell.com.

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