Norsk Hydro Increases Interest Offshore Angola

The Angola government confirmed that Hydro will have a considerable interest and important tasks in the exploration and possible development of the highly promising Block 34 on the Angolan shelf. Norsk Hydro will also take over a 10 percent interest of Block 25 in Angola. These awards represent an important step forward in Hydro's strategy of further development in Angola as a core area in Hydro's international oil operations.

Angolan authorities said in June that the state-owned oil company Sonangol was given operator responsibility for the exploration and development of deep-sea Block 34, with technical assistance from Hydro. Hydro's personnel will be integrated as a part of the Block 34 team in Sonangol to provide technical and operational support for the young Angolan oil company.

Hydro and Sonangol will continue the extensive cooperation program that started in 1998. Through the Management and Technology Transfer program, Hydro has committed itself to transferring and building up Sonangol's expertise so that the company can take on new exploration and development tasks within and outside of Angola independently.

Sonangol has a 20 percent share of Block 34 and Hydro will have 30 percent. The other participants are Phillips Petroleum, Braspetro (the international subsidiary of Petrobras) and Shell. Block 34 is about 93 miles northwest of Luanda and immediately south Block 17, where Hydro has a 10 percent interest. The Girassol field in Block 17 is expected come on stream later this year. Hydro also has 27.5 percent of Block 5 and 10 percent of Block 9, which are in shallow water.

Hydro has also signed an agreement with ExxonMobil in which Hydro will take over a 10 percent interest in Block 25 approximately 250 miles southwest of Luanda. Block 25 is next to Block 24, where Sonangol and ExxonMobil recently confirmed an oil find in the Semba 1 well. The water depth in Block 25 varies between 2,297 and 7,380 feet. Hydro regards Block 25 as one of the most promising deep water areas in the Kwanza basin, which is in Angolan waters where few exploration wells have been drilled. A new exploration well is expected to be drilled in the block later this year. Agip is the operator of block 25 with a 40 percent interest, Sonangol and ExxonMobil each hold a 25 percent interest and Norsk Hydro holds the remaining 10 percent.