Marathon Submits PDO for Alvheim Field Offshore Norway

Marathon Oil Corporation, through its wholly owned subsidiary Marathon Petroleum Norge AS, and its Alvheim project partners have submitted the plan for development and operation (PDO) of the Alvheim Field to the Norwegian Ministry of Petroleum and Energy. Approval of the PDO is anticipated during the fourth quarter of this year and first Alvheim production is expected in early 2007. Marathon holds a 65 percent interest in Alvheim and serves as operator.

The Alvheim PDO outlines the companies' plans to develop the field using a floating production, storage and offloading vessel (FPSO) with subsea infrastructure consisting of five drill centers and associated flow lines. The FPSO will be a conversion of the multipurpose shuttle tanker Odin for which the Alvheim group signed a purchase and sale agreement with Statoil earlier this year. The PDO also outlines transportation of produced oil by shuttle tanker, transportation of produced natural gas to the U.K. via existing infrastructure and re-injection of produced water.

"The submittal of this PDO is a key milestone in Marathon's effort to develop the Alvheim Field," said Steven B. Hinchman, Marathon senior vice president of Worldwide Production. "Since establishing Norway as a new core area in 2002, Marathon has implemented a robust exploration program resulting in four discoveries out of five wells drilled. This successful exploration program has set the stage for Marathon and our partners to commercialize Alvheim, one of the largest undeveloped oil fields on the Norwegian Continental Shelf."

Alvheim comprises the Kneler and Boa discoveries and the previously undeveloped Kameleon accumulation. The Alvheim Field currently is estimated to contain resources of approximately 180 million gross barrels of oil equivalent.

Recently, the Alvheim group reached agreement to tie in the nearby Klegg discovery, in which Marathon holds a 46.9 percent interest, subject to the approval of a Klegg PDO. Production from a combined Alvheim/Klegg development is expected to ramp up to more than 50,000 net barrels per day during 2007. The combined Alvheim/Klegg development is estimated to contain resources of approximately 200-250 gross million barrels of oil equivalent. In addition, the Hamsun discovery announced earlier this year is being examined as another possible tie-back to Alvheim.

Marathon's partners in the Alvheim development are ConocoPhillips AS with a 20 percent working interest and Lundin Norway AS, which holds the remaining 15 percent interest. The companies are licensees in Production License PL 203, PL 088BS and PL 036C on the Norwegian Continental Shelf.

Norsk Hydro Produksjon a.s. holds a 28.531 percent interest in Klegg and serves as operator. Other Klegg interest owners are Marathon Petroleum Company (Norge) (46.904 percent), TOTAL E&P NORGE AS (24.243 percent), and AS Ugland Rederi (0.322 percent) as licensees in PL 036 on the Norwegian Continental Shelf.

MST Odin Facts
  • Odin overall length is 252.2 meters (827.43 feet)
  • Odin overall breadth is 42 meters (137.8 feet)
  • Double hull
  • Current storage capacity is 530,000 barrels of oil and will increase to 560,000 after vessel modifications are complete