Hydro Reduces 2006 Oil and Gas Production Target
Norsk Hydro ASA has revised its oil and gas production target for 2006 down with about 5 percent from 615,000 to 585,000 barrels of oil equivalents per day (boed). The reduction of 30,000 boed is equally divided between Hydro's Norwegian and international portfolio and is mainly due to unforeseen events in Norway, Canada and US Gulf of Mexico, and somewhat lower gas export from Norway than planned.
Hydro is experiencing production shortfall from the non-Hydro-operated fields in Norway, primarily due to the unplanned shutdown of the Visund field and delayed production build-up from new fields and delayed drilling of production wells at other fields.
Internationally, Hydro's short-term production outlook in the US Gulf of Mexico continues to be negatively impacted by the high demand for oil and gas services following hurricanes in 2005 resulting in lower production on the shelf. In addition, deepwater production has been lower than Hydro's initial projections. In Canada the Terra Nova field will be out of production until September due to mechanical problems and an extended maintenance shutdown.
Hydro-operated fields in Norway are producing according to plan. The Grane field continues to produce above planned levels, and compensates for somewhat reduced production from other fields.
Any negative consequences of the ongoing oil services strike on the Norwegian Continental Shelf have not been accounted for in the revised target.
Hydro's oil and gas production in the second quarter 2006 is estimated to be about 535,000 boed of which 32 percent is gas.
The revised production target for 2006 is a result of delayed production and has no impact on Hydro's oil and gas reserves.
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