Statoil Revises 2007 Production Forecast
Statoil ASA is modifying its forecast for oil and gas production in 2007 to 1,150,000-1,200,000 barrels of oil equivalents per day (boe/d) based on an oil price of USD 60 per barrel, down from 1,300,000 boe/d.
The shortfall is largely caused by delayed ramp up of new fields and delays in projects and activities. As a direct consequence of reduced production, production costs per boe will increase to above NOK 30 per barrel/bbl for 2007.
The original target was based on successful deliveries from a number of technically demanding fields, first and foremost the two pioneering high temperature/high pressure (HT/HP) fields Kristin and Kvitebjorn.
--As previously announced the production on the 'Kvitebjorn field was temporarily shut down on 1 May, to allow for drilling of two further production wells. Production is expected to resume during the fourth quarter 2007. --On the Kristin field, the step up of production will be further delayed. Running up the wells has to be done cautiously to ensure stability in the reservoir. Completion during the winter season was slower than anticipated due to a combination of bad weather and technical challenges. Plateau production is expected to be reached towards the end of the third quarter of 2007. --Additionally, the Volve project is slightly delayed owing to late arrival and modification of the rig. This field is now expected to commence production in the third quarter of 2007. --Internationally, production build-up on the partner operated Shah Deniz gas field in Azerbaijan has been slower than anticipated due to technical problems with the production wells. Build up of production from In Amenas in Algeria has been hampered by technical problems causing irregularities in the processing facilities.
To some extent the shortfall has been counteracted by increased gas production and export from other fields. However, market conditions and customer off-take will limit the extent to which such compensatory measures can be fully utilized.
The measures to improve drilling performance, put in place in late 2006, are paying off. Drilling of new production wells in the Tampen area has improved so far in 2007.
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