Norway to Make Final Decision on Gjoa by Summer

The Norwegian government has proposed that the North Sea's Gjoa field be developed in accordance with the plan for development and operation (PDO), at the Council of State today. The Norwegian parliament (Storting) will make a final decision before the summer.

"After having worked hard for a long time to put together a PDO, we are very pleased to have found a profitable solution that will allow the area's resources to be recovered," says Kjetel Digre, who heads the Gjoa project.

He adds that the process with the authorities and key players has been extremely good and it is gratifying that the plan is about to receive government support. Statoil is development operator with Gaz de France as production operator.

"The development solution allows flexibility with regard to the possibility of new recoverable finds in the area," Mr. Digre emphasizes.

"The Gjoa plans have already produced positive spin-offs. The development of the Hydro-operated Vega field can now be implemented in a profitable way. The development project and production planning is taking place in good collaboration with Hydro."

According to Mr. Digre, it has been shown that the main part of Gjoa's power needs being met with onshore generation, can be profitable. Plans call for coordinated electricity generation from the Mongstad energy project (EVM). A combined heat and power (CHP) station at Mongstad, north of Bergen, will come into operation in 2010.

"This solution has been chosen based on accessibility and regularity requirements. With power from land, we will be able to remove up to five gas turbines which otherwise would generate platform electricity," he says. "Hence we avoid large carbon and nitrogen oxide emissions."

The electricity generation license application is now being considered by the Norwegian Water Resources and Energy Directorate (NVE).

Gjoa will exploit available capacity in existing pipelines. Gas will be transported via the British Flags pipeline system to St Fergus in Scotland. Oil will be piped to the Troll II pipeline and on to Mongstad.

"Gjoa oil is of good quality and will be important for future supply of raw materials to the Mongstad refinery," Mr. Digre notes.

Gjoa operations are being planned with logistical functions and a supply and helicopter base at Floro, north of Mongstad. The operations organization of operator Gaz de France will be based in Stavanger.

"We have sought solutions which involve local trade and industry in Floro, for the development and operations phases," he emphasizes.

Total Gjoa investments are estimated at NOK 27 billion in 2006 money. After Snohvit, this is the biggest project Statoil has under development.

Plans call for production of oil and gas from the field to start in 2010.

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