Development of the Kvitebjørn and Grane fields

-The Government proposes to develop the Kvitebjørn and Grane fields. The development of these fields will be important for the employment in the supply industry, and according to the companies lead to employment of about 15.000 man-labour year. In addition, there will be considerable indirect effects on the employment. Most of the work will be carried out during the years 2001 to 2004, says the Minister of Petroleum and Energy, Olav Akselsen.

The supply industry will be in a period of few new development projects in 2000 and first half of 2001. Many suppliers have already laid off parts of the work force – particularly in the offshore yards. Grane and Kvitebjørn are major field developments, and will contribute to new activities in the supply industry, and secure employment in a difficult time.

Kvitebjørn is a small field in the northern part of the North Sea, containing gas and condensate. The licensees are Statoil (operator), Hydro and Elf. The proven reserves in the field include 47 bill scm dry gas, 17 mill scm condensate and natural gasoline in addition to smaller quantities of LPG.

The field will be developed with an integrated production platform containing a drilling module, living quarters and a processing module. The gas will be transported through a new pipeline to the gas terminal at Kollsnes for further processing. The condensate will be transported through a new pipeline (Kvitebjørn Oil Pipe) which will be connected to the Troll Oil Pipe 2 for further transport to Mongstad. Kvitebjørn will be given responsibility for supply of gas under gas sales commitments entered into by the GFU.

The production from Kvitebjørn will according to plan come on stream in 2004, and the production plateau level will be 6 bill scm a year. Total investments related to the project are estimated to 8,7 bill NOK, including investments related to pipelines and expansion of the gas terminal at Kollsnes. Net present value of the project is estimated to 3,6 bill NOK, using a discount rate at 7 per cent before tax.

The Government also proposes to develop the Grane field. Grane is a large oil discovery, located approximately 160 km west from Stavanger. The licensees are Hydro (operator), Statoil and Esso. The field contains 112 mill scm oil and will be developed with an integrated platform based on the sea bed. The platform will contain a drilling module, living quarters and processing module. The oil will be transported through a new pipeline towards the terminal at Sture. Gas will be used to increase the oil production. As the Grane field contains only small quantities of gas, gas will be imported from other fields through a new pipeline from the Heimdal field. The production from Grane will according to plan come on stream in 2003 and will within 2005 reach a production level of more than 200.000 barrels a day.

Total investments related to Grane are estimated to 15 bill NOK, including investments related to pipelines and expansion of the terminal at Sture. Net present value of the project is estimated to 10,9 bill NOK, using a discount rate at 7 per cent before tax.

- The gas from the Kvitebjørn field will increase the flexibility in the production capacity from the Norwegian shelf. The development of Kvitebjørn will be an important contribution to cover an increasing demand for gas in Europe. The Grane project will be a large and profitable development. The development of Kvitebjørn and Grane will in addition offer important opportunities for the oil supply industry and is likely to improve the employment situation in this industry, says the Minister of Petroleum and Energy, Olav Akselsen.