The Siri field to be back in production in January
Stavanger 4 January 2010 Norwegian Energy Company ASA (Noreco - OSE:NOR), Due to rough weather conditions in the North Sea, production from the Siri field in Denmark is expected to be resumed in January 2010. The Nini East field development is now completed and will start production shortly after the Siri field is back in production.
Oil production from the Siri area fields (Siri, Nini and Cecilie) have been shut down since 31 August 2009 after a routine inspection revealed cracks in a water buffer tank at the Siri platform.
The operator DONG Energy is currently installing a metal frame as a temporary solution to stabilize the tank and resume production until a permanent solution is in place. Installation of the temporary solution is at an advanced stage, but rough weather conditions in the North Sea has delayed the work. The operator DONG Energy and Noreco expects to resume production in January 2010 depending on favourable weather conditions.
The Nini East-field is fully developed with three new wells and is expected to commence initial production shortly after the Siri-platform resumes production. The Nini East development will significantly increase the total production from the area. The field is developed as a satellite to the Siri-field with a new un-manned platform approximately 40 km. from Siri.
As previously reported, Noreco has, under its Group insurance package, cover for inter alia business interruption, subject to a retention period of 60 days and an overall limit of 12 months. Thus, provided there is found to be cover under its policy Noreco will for any period of resulting production loss in excess of 60 days receive an insurance payment of USD 50 per barrel of crude not produced. In addition, the business interruption cover also provides coverage for costs associated with acts aimed at mitigating a production loss, such as temporary/provisional measures to restart production. The loss adjuster is currently processing the claim. Although Noreco is hopeful of cover, it is at this stage premature to attempt to draw any definite conclusion until the investigations into the cause of the damage has been completed.
The shutdown is not expected to have any adverse effect on the reservoir or field reserves in the Siri area. The shut down in the Siri-area has had a negative impact on Noreco´s oil production in 2009. Noreco will report production for December and 4th quarter 2009 in the beginning of January in accordance with normal practice.
Contacts:
Scott Kerr , CEO (+47 99 28 38 90)
Einar Gjelsvik, VP Strategy & IR (+47 99 28 38 56)