Hydro has entered into an agreement to sell its 10 percent stake in production licences PL064, PL077, PL078, PL097, PL099, PL100 and PL110 in the Norwegian offshore sector, including the Snøhvit gas field development. The buyer is Statoil ASA (STOHF)
At the same time Hydro also entered into another agreement: The purchase of a two per cent interest from Statoil in the PL134B and PL199 licences, including the Kristin field.
The Snøhvit transaction is expected to result in an estimated accounting gain for Hydro of approximately NOK 100 million, after tax.
"We are very satisfied with the agreements. This is a result of Hydro's active management of the company's oil and gas portfolio, and in line with Hydro's strategic positions. The two percent share increase in production licences PL134B and PL199 on Haltenbanken in the Norwegian offshore sector will also strengthen Hydro's ownership position in the Kristin field", says Senior Vice President Lars Christian Alsvik of Hydro Exploration
and Development Norway.
Hydro's investment reduction from January 2004 onward following the proposed agreements will be about NOK 2900 million. As a result of the agreements Hydro's total reduction in proven reserves will be about 80 million barrels of oil equivalents (SEC's definition).
The Snøhvit field is approximately 130 km northwest of Hammerfest and was discovered in 1984. The development solution is based on a sub-sea development with gas and condensate pipeline to an onshore processing plant, where gas is converted to Liquefied natural gas (LNG) and shipped to the market. Contractual deliveries are due to start in 2006.
The Kristin field is part of Haltenbanken Vest in the Norwegian offshore sector. The authorities approved a Plan for Development and Operation in December 2001. The field is a sub-sea development, tied back to a semi-submersible production platform. Production is planned to start 2005.
The agreements will be signed January 23rd, and are subjects to approval by the Norwegian authorities.