Hydro signs Grane production drilling deal

Norsk Hydro has signed a letter of intent with Odfjell Drilling Management AS regarding the contract award for production drilling on the Hydro-operated Grane oil field in the Norwegian sector of the North Sea. The final contract will be signed in the near future. The contract is valued at some NOK 430 million (USD 48 million) and will last until mid-2008 with an additional four-year option. The Grane field, which lies some 185 kilometers west of Stavanger, Norway, will be developed with an integrated accomodation, processing and drilling platform on a steel jacket. Combined development investments total some NOK 15 billion (USD 1.7 billion). The field is estimated to contain some 700 million barrels of recoverable oil, making Grane the largest proven oil field in Norway that has not yet been developed. The field is expected to reach a maximum daily production rate of 214,000 barrels per day in 2005. The oil will be transported from the field by pipeline to the land-based Sture terminal. Hydro's equity share in Grane is 24.4 percent. Other shareholders include Statoil (6.4 percent), the state's direct financial interest (43.6 percent) and ExxonMobil (25.6 percent).