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Hydro confident of oil/gas reserves

Norway's Norsk Hydro said on Friday it was confident in its estimates of its proved oil and gas reserves even though it books a higher proportion of gas from the giant Ormen Lange Norwegian gas field than Shell.

Norway's Norsk Hydro said on Friday it was confident in its estimates of its proved oil and gas reserves even though it books a higher proportion of gas from the giant Ormen Lange Norwegian gas field than Shell.

Shell cut its proven oil and gas reserve estimates for a second time this year on Thursday, largely due to a downward revision of its figures for the big Ormen Lange gas field development due on stream in 2007.

"We are confident in what we have done ... We are confident with all the reserves," Norsk Hydro's spokeswoman Kristin Brobakke said.

Hydro, which has an 18 percent stake in Ormen Lange, has booked 70 percent of what it expects to recover from the field, she said.

Shell, with 17 percent of the field, by contrast only books a little over a fifth of its share of the field's estimated recoverable reserves after a new cut in estimates.

Norway's Statoil, with an 11 percent stake in Ormen Lange, has booked only about 25 percent of its portion of the estimated recoverable reserves, a Statoil spokeswoman said.

Norsk Hydro is operator of the development phase of Ormen Lange, Norway's biggest offshore project with a price tag of NOK 66 billion (USD 9.54 billion) including a pipeline to Britain. Shell will become operator once production begins.

Shell's latest cuts included lowering its Ormen Lange bookings planned for 2003 by 166 million boe to 90 million barrels. It was an embarrassment since it had identified those reserves as bookable only a few weeks ago.

Differences in interpreting the US Securities and Exchange Commission's (SEC) guidelines on how to book reserves appear to be behind the different booking


 

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