Grane Begins Production Ahead of Schedule

Oil production from the Grane field started on September 23rd. "The Grane project shows what can be achieved when the operator, partners and contractors all pull together. We have spent about one and a half billion kroner less than budgeted and production started three weeks ahead of schedule," says Torgeir Kydland, president of Hydro Operations and Production.

The first production well on the Grane platform came onstream at 06:59 on September 23rd. This is the first of 12 pre-drilled wells that are being linked up to the platform. The drilling of the production wells has been completed ahead of schedule and below budget. This gives a good starting point for a rapid build-up of production. Oil production from the field will be gradually increased until it reaches the planned level of just over 210,000 barrels per day. According to the development plan, peak production is expected to be reached during the first six months of 2005.

"The Grane field will give a considerable boost to Hydro's oil production. We will ensure that the excellent work carried out in the reservoir and drilling departments in Hydro, and by our contractors, continues after start-up, so that a rapid and safe build up of production is possible," says Torgeir Kydland.

It is estimated that 700 million barrels of oil can be recovered from Grane. The field will become one of the top-producers in the Norwegian offshore sector when it reaches peak production.

The Grane field has been developed with an integrated production and drilling platform at a water depth of 120 meters, 185 kilometers west of Haugesund. The field was discovered by Norsk Hydro in 1991, and has been developed in close collaboration with Aker Kværner, which has designed and built the whole platform.

Oil from Grane is transported through a 212-kilometer long pipeline to Hydro's terminal at Stura in Øygarden. Grane receives gas from the Heimdal Gas Centre via a 50-kilometer gas pipeline. This gas is injected into the Grane reservoir to increase oil production. The Grane field contains heavier oil than is found in the rest of the Norwegian sector (API 18.5), and is therefore expected to be sold at a lower price than average Brent Blend.

The Grane Licensees are: Norsk Hydro as operator with 38%; Petoro with 30%; ExxonMobil with 25.6% and ConocoPhillips with the remaining 6.4%.
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