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    Nine companies pay $959 million for expanded Norwegian offshore stake

    March 21, 2002
    Norway's Ministry of Petroleum and Energy has sold a 6.5% stake of the country's offshore reserves to nine companies. A total of 30 licenses were sold as part of a sale of the State's Direct Financial Interest (SDFI), Norwegian officials said. Buyers were Norsk Hydro AS, TotalFinaElf SA, Royal Dutch/Shell Group, Conoco Inc., Marathon Oil Co., Paladin Resources Norway AS, Gaz de France, Idemitsu Co. and DONG AS.


    By OGJ editors

    WASHINGTON, DC, Mar. 21 --Norway's Ministry of Petroleum and Energy said Mar. 19 that it sold a 6.5% stake of the country's offshore reserves to nine companies.

    A total of 30 licenses were sold as part of a sale of the State's Direct Financial Interest (SDFI), Norwegian officials said. Buyers were Norsk Hydro AS, TotalFinaElf SA, Royal Dutch/Shell Group, Conoco Inc., Marathon Oil Co., Paladin Resources Norway AS, Gaz de France, Idemitsu Co. and DONG AS.

    "The restructuring of the state's ownership interests on the Norwegian Continental Shelf will contribute to the creation of additional value from our petroleum activities in line with the objectives set by the Storting (Norway's parliament) for the sale," said Einar Steensn&ealig;s, minister of petroleum and energy. "The state will retain substantial direct ownership in fields following this sale. It is important that the state, in managing the petroleum resources on the NCS, continues to act with a long-term perspective," Steensn&ealig;s said.

    Officials said the sale would help boost development in marginal and mature fields by "harmonizing" exploration in the Oseberg and Gyda-Tambar areas and strengthening operators in the Oseberg, Grane, and Draugen fields.

    Norwegian officials in December 2000 sold a 15% stake in SDFI to state-owned Statoil ASA. That move gave Statoil output of 1 MMboe/d. And without the SDFI transfer, it would have been 700,000 boe/d, according to company officials.

    Conoco purchase
    Conoco Mar. 20 reached an agreement with the Norwegian State to purchase an additional 6% interest in the billion-bbl Heidrun oil and natural gas field and a 15% interest in Njord field. With these purchases, Conoco said it would raise its total Norwegian production by nearly 20% to 120,000 boe, 26,000 boe of which is natural gas.

    Following the transaction, Conoco will hold 24.3% of Heidrun—a field that the company discovered in 1985. Conoco developed Heidrun using concrete tension leg platform technology and production began from the field in 1995. The field lies in 1,100 ft of water in the Norwegian Sea. Production is expected to extend beyond 2020, Conoco said.

    Njord field, which has been producing since 1997, was developed using a floating semisubmersible drilling and production facility.

    The additional Heidrun and Njord interests will add 50 million boe, 7 million boe of which is gas, to Conoco's proven reserves for 2002.

    "[The purchase] increases our presence significantly in the Norwegian North Sea and gives strategic weight to the application that Conoco has submitted for the 17th licensing round," said Tina M. Langtry, president and managing director of Conoco Norway.

    For the last 10 years, Conoco's exploration and new field development outlays in Norway have averaged $250 million/year, the company said.

    Licensing rounds
    In a related announcement, energy officials said it received applications from 13 oil companies for its 17th licensing round on the NCS. Companies include Agip SPA, BP PLC, ChevronTexaco Corp., Conoco. DONG, Enterprise Oil PLC, Fortum Corp., GDF, Norsk Hydro, Phillips Petroleum Co, RWE-DEA AG, Shell, and Statoil. Officials said they plan to make awards in second quarter 2002.

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