In December 2001 the Norwegian Government decided to reduce crude oil production by 150 000 barrels per day in the first half of 2002.

Mr. Einar Steensnæs, Minister of Petroleum and Energy, states that the decision to reduce crude oil production has the desired effect in the market, and that the average crude oil production will be 3.02 mill barrels per day in both the first and second quarter of 2002. The Minister says Norway will meet its obligation of reducing crude oil production by 150 000 barrels per day, even though a five per cent production flexibility will be introduced for all fields comprised by the regulation.

The Ministry of Petroleum and Energy normally issues production permits annually to each field on the Norwegian Continental Shelf (NCS). However, due to curtailed production for the first half of 2002, production permits have now been issued on a quarterly basis. Hence, production from the NCS will be curtailed with effect from the first quarter of 2002. For both the first and second quarter of this year, the sum of the field specific production permits implies an average crude oil production of 3.02 mill barrels per day.

Production permits are based on field specific production forecasts. However, actual production might deviate from the prognosis. This is what we have experienced so far in the first quarter of 2002. Some fields produce less than forecasted due to e.g. technical problems. Other fields produce more than forecasted, implying reduced production in March to avoid exceeding the production permit for the first quarter of 2002. Production so far this quarter is in line with the issued production permits. The fact that some fields have produced intensively early in the quarter and thus have to reduce production in March was expected and in accordance with past experience.

Furthermore, some fields will not be able to reach the crude oil volumes defined in the production permit for the first quarter of 2002. Hence, some flexibility will be awarded in the first quarter for all fields comprised by the production regulation.

Production in the two first months of 2002 was in average 3.12 mill. barrels per day. This means that production in March cannot be more than 2.83 mill barrels per day, in order to achieve the goal of producing 3,02 mill. barrels per day as an average for 1. quarter.