Lufeng Field Exceeds Production Forecast

The Chinese Lufeng field operated by Statoil yielded more than 26 million barrels of oil between its start-up in December 1997 and early July. This is in comparison to the estimate of approximately 25 million barrels forecast when plans were made to develop Lufeng. Plans call for Lufeng to produce until the end of June 2003. A total of 31 million barrels could have been recovered by then, representing a recovery factor of roughly 30 percent. Production regularity from the field has been 99.4 percent so far, and all technical aspects are functioning very well. The oil content in produced water being discharged to the sea is around 15 milligrams per litre, compared with a Chinese government requirement of less than 50 milligrams. Lufeng is being produced by the multipurpose shuttle tanker, Navion Munin, and five subsea wells. Daily output currently stands at roughly 9,000 barrels. Statoil has a 75 percent interest through its Statoil (Orient) Inc subsidiary, the remaining 25 percent is held by the state-owned China National Offshore Oil Corporation.