DONG Develops Temporary Production Solution at Siri

On August 31, 2009, following a routine inspection revealing cracks in a subsea structure connected to the oil storage tank underneath the Siri platform, DONG Energy decided to stop production from the Siri field.

The structure carries the load of the caisson containing risers and conductors to and from the subsea storage tank. The cracks developed due to failure of the grouting material designed to fix the caisson. No discharge of oil or other pollution has been detected as a result of the cracks.

As the license operator, DONG Energy has now developed a temporary solution designed to support the caisson to prevent any further damage. Such stabilizing will also ensure that any necessary inspections will be carried out in a safe manner in order to establish a permanent solution. The temporary solution involves a drilling rig being connected to the caisson, taking the load off the caisson through the use of specially-designed lifting gear.

With the temporary solution production is expected to be resumed during November 2009, depending on the uncertainty regarding weather conditions, the processing time involved in connection with third-party verification of the temporary solution and regulatory approvals, among other factors.

DONG Energy's share of production from the Siri-area in 2008 was app. 2.9 million barrels of oil (bbl) representing about 16 per cent of the company's total oil and gas production in 2008.

DONG Energy's partners in the area are Noreco and RWE.

The production stoppage at Siri will adversely affect DONG Energy's expected production from the area in 2009. As production from other DONG Energy fields is expected to exceed expectations, the overall effect will not alter the previous guidance for DONG Energy's financial results for 2009 or the company's expected investment level.