Hydro Brazil: Statoil to Keep Norsk Hydro Oil Development Plans

RIO DE JANEIRO Jan 03, 2007 (Dow Jones Newswires)

Plans for the development of a Brazilian oil field won't be affected by Norwegian oil giant Statoil ASA's (STO) buyout of the oil and gas business of its smaller rival, Norsk Hydro ASA (NHY), the president of Norsk Hydro's Brazilian unit said Wednesday.

"All of Hydro's oil and gas assets will be transferred in the merger, including those in Brazil," Hydro Brazil President Olav Skalmeraas told Dow Jones Newswires.

Statoil in December said it will acquire Hydro's oil and gas business in an agreed share-swap transaction valued at around $30 billion. The buyout is planned to be completed in the third quarter of 2007 but is still pending the approval of European Union antitrust authorities, Skalmeraas said.

Hydro's plan to produce between 60,000 to 100,000 barrels a day by late 2009 from the Peregrino field in Brazil's Campos Basin off the coast of Rio de Janeiro will be maintained by Statoil, Skalmeraas said.

Hydro has a 50% operating stake in the field, with Anadarko Petroleum Corp. (APC) holding the remainder. Hydro said in November it entered into an agreement with Canadian energy firm EnCana Corp. (ECA) to buy a 50% stake in the Peregrino field for $350 million.

Currently, Brazil's state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, accounts for more than 95% of Brazil's 1.8 million b/d oil production. But by the end of the decade, foreign firms are slated to add at least 300,000 b/d to Brazilian output.

Skalmeraas said he will stay as head of Hydro in Brazil, where the company has stakes in upstream aluminum and bauxite activities that won't be merged with Statoil.

The company owns a 34% stake in the Brazilian alumina refinery Alunorte, which recently completed a capacity expansion to increase output to 4.5 million metric tons a year. Alumina is the raw material for aluminum production.

Copyright (c) 2007 Dow Jones & Company, Inc.

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