Statoil: Luva Gas Find May Play Role in Pipeline Plans

STAVANGER, Nov 16, 2006 (Dow Jones Newsires)

Statoil's ASA (STO) Luva gas discovery in the Halten Nordland area of the Norwegian Sea and future drilling success at nearby prospects may help accelerate build-up of gas infrastructure in the area, the company said.

Speaking at an oil conference in Stavanger, Statoil's vice president for strategy and business development, Torstein Hole, said the 38 billion cubic meter gas discovery could play a role in gas export options from the Norwegian Sea.

"It is important that there are new major steps in infrastructure developments" in the area, specifically around transport lines, Hole said. Statoil has a strong exploration program in the Halten Nordland area of the Norwegian Sea over the coming 12-18 months. "We have a drilling plan (nearby Luva) for two years ahead...we need to prove more gas resources to enable the new pipeline to be built out of that area," said Statoil spokesman Jone Stangeland. He said the company would evaluate several gas export options, but added that there are no firm timelines for development yet.

In August Statoil bought BP's (BP) 25% stake in license 218 in two blocks in the Norwegian Sea west of Bodo, which incorporates Luva, boosting its stake to 75% and taking on operatorship. ExxonMobil (XOM) owns 15% and ConocoPhillips (COP) the remaining 10% stake in the license.

Hole said development of pipelines in the Norwegian Sea could be a step toward linking all three areas of the NCS, the Barents, Norwegian and North Seas, but added that this would be dependent on exploration successes and the willingness of the government to open new areas.

The northern Norwegian Sea offshore Lofoten, including Nordland VI and VII and Troms II, which lies between the Norwegian and Barents Seas, is currently closed to exploration until at least 2010 under the government's current management plan, making a link between the two seas impossible for the time being.

The areas are widely regarded as among the most prospective remaining on the Norwegian Continental Shelf.

Statoil's ambitions in the Norwegian Sea, and the potential in as yet unopened prospects, are pertinent in light of its recently extended target to produce 1 million barrels a day of NCS oil equivalent until 2015, which Hole said implied "a need to make many new discoveries."

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