Norway and Russia to Work Together in Barents Sea

StatoilHydro is now a partner in the first phase of the Shtokman development. The Norwegian company will hold 24% interest in Shtokman Development Company, while France's Total will have 25% and Russian Gazprom will keep 51%.

Offshore Russia in the Barents Sea, Shtokman field is the largest undeveloped offshore gas field in the world. Projected to contain about 3,700 billion cubic meters of natural gas, the field is expected to produce up to 23.7 billion cubic meters in the first phase, including LNG and piped gas.

"I am very pleased to see StatoilHydro as a participant in the Shtokman field," said Norwegian Prime Minister Jens Stoltenberg. "This will strengthen the Norwegian-Russian ties as neighbours and our strategic partnership in the energy sector in the High North. The participation also underlines our joint responsibility to ensure a sustainable management of the resources in the Barents Sea."

The Shtokman Development Company will design, fund and build any infrastructure necessary during the first phase, including offshore installations, pipeline, and onshore processing plants for LNG and piped gas. Under the agreement, the Shtokman Development Company will own any infrastructure for 25 years after the start of production.

"The agreement signed today will open a new page in our cooperation with the merged StatoilHydro," said Gazprom Chair Alexi Miller. "We have giant reserves of gas in the Barents Sea, while our partners from Norway have good experience in production and transportation of gas in harsh Arctic conditions. Our joint efforts will be the keystone of success in the Arctic."

Final investment decisions on the project are due the second half of 2009. Until then, StatoilHydro is responsible only for its share of the planning and study costs.

"Leveraging our technology, industrial experience and expertise from large offshore developments can provide long-term growth opportunities in Russia," said Helge Lund, CEO of StatoilHydro. "We believe Shtokman can be a catalyst for developing and adopting technologies capable of operating efficiently and environmentally safely in the cold and harsh conditions."