THE WALL STREET JOURNAL: Licensees Mull Gas Devt At Norway Troll West Field -Govt (ShellNews.net)

DOW JONES NEWSWIRES

August 24, 2004 6:57 a.m.

STAVANGER, Norway (DOW JONES)--Licensees of the Troll West field in the North Sea are considering gas production at what has so far only been an oil-producing field, the Norwegian Petroleum Directorate said Tuesday.

Officials at the state-owned pipiline infrastructure company Gassco told Dow Jones Newswires the field could pump between 20 million cubic meters and 60 mcm a day, if the go-ahead was given.

The NPD warns, however, that tapping into the gas zone could significantly reduce the volumes of oil the field could produce, and licensees - including Statoil ASA (STO) and Norsk Hydro ASA (NHY) - are currently debating when gas development should begin.

"Today, Troll is the largest gas field in Western Europe, measured in remaining recoverable reserves," said NPD Director Tormoed Slaatsveen.

Under Troll's currently approved plans, recoverable oil reserves amount to 1.447 billion barrels of crude oil, which represents a recovery rate of around 36% of the total.

"In other words, the potential for enhancing oil recovery is very considerable," the NPD said.

The NPD reckons a 50% recovery rate, which would amount to 1.9 billion barrels, is achievable.

"Extraction of gas reduces the possibility of going back later on to produce oil," said Slaatsveen. "If we are to produce as much oil as possible, we therefore have to wait before commencing significant gas production."

The Gassco official said the company had just started a new study to see how the gas could be processed and transported.

Other owners of the Troll field include Royal Dutch Shell (RD), Total (TOT) and ConocoPhillips (COP).

-By Ian Talley, Dow Jones Newswires; +47 22 20 10 58; ian.talley@dowjones.com