Marathon Awards Alvheim Topsides Contract to Kvaerner

Aker Kvaerner has been awarded a contract to perform topsides and hull definition engineering (FEED) for the floating production storage and offloading vessel (FPSO) to be placed on the Alvheim field - West of Heimdal.

"The Alvheim project is one of the very few potential new North Sea field developments to be started in 2004 and thus an important project for the oilservice industry. It also marks the entry of Marathon as an operator on the Norwegian shelf. We are pleased to be working for them and are looking forward to learn from this new relation," says executive vice president Simen Lieungh in Aker Kvaerner.

Marathon is the Alvheim area operator, holding a 65 percent working interest. ConocoPhillips has a 20 percent working interest, and DNO holds the remaining 15 percent. The Alvheim field comprises the Kneler and Boa discoveries and the previously undeveloped Kameleon discovery.

The Odin multipurpose shuttle tanker will be modified to an FPSO once a plan for development and operation is approved. Marathon and its partners plan to submit an impact assessment to the Norwegian regulatory authorities for the Alvheim development in early March and a plan of development and operation by midyear. Approval of the plan of development and operation is anticipated by the third quarter, and first production is expected during 2006.

The Odin vessel was built in 2001. It was the last vessel in a series of four. Two of the previously delivered vessels have been modified to FPSOs by Aker Kvaerner operating respectively in UK North Sea (Pierce) and South China Sea (Lufeng). The Alvheim project and Aker Kvaerner will benefit from this experience as well as experience from other FPSOs delivered.

The FEED contract is signed by Aker Kværner Engineering & Technology AS, a company within the Aker Kvaerner group.

Marathon Oil said that the Alvheim development is set to produce over 75,000 barrels per day (bpd) by 2007.First production is expected in 2006, with Marathon's net production rising to around 50,000 bpd by 2007. As Marathon has a 65 percent stake in Alvheim, that implies gross output of slightly more than 75,000 bpd.

The two fields combined have an estimated 200-250 million barrels of oil equivalent.