Statoil Extends Life of Lufeng Field Offshore China

New technology has made it profitable to extend production from Statoil's Lufeng field in the South China Sea until 2008, rather than shutting it down this February as originally planned.

It was resolved earlier this year to keep the field on stream until August, when the Munin production ship is due to move to another assignment.

"While the ship is away, we intend to carry out sidetrack drilling," says Roald Riise, vice president for development and production in International Exploration & Production.

"This technology, which wasn't available when we first developed the field, allows us to tap new pockets of oil which would otherwise be beyond our reach."

Planning for the three sidetracks will start immediately, with drilling set to begin in the autumn.

The drilling team comprises personnel both from Statoil and from its license partner, CNOOC.

Lufeng is currently producing about 6,000 barrels of oil per day. After the sidetracks have been drilled, this output is expected to exceed 10,000 daily barrels.

More than 32 million barrels have so far been recovered from the field, well above forecasts when production began in December 1997 that total output would be about 25 million barrels.

Statoil has a 75 percent interest in Lufeng, and CNOOC holds the remaining 25 percent.

Munin has a production staffing of roughly 50 people, with approximately 20 people employed at the operations office on land.

"This means we'll be staying in China," says Mr Riise. "That could be advantageous if other interesting opportunities arise."

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