An updated resource estimate by the Norwegian Petroleum Directorate indicates more than 9.1 bcm of oil equivalent remain to be produced on the Norwegian continental shelf. This in more than twice as much as has been produced so far.

The NPD estimates the total recoverable petroleum resources on the Norwegian shelf as of Dec. 31, 2002 at 12.9 bcm oil equivalent. This is a reduction of 830 MMcm oil equivalent compared to the previous annual report.

There are two main reasons for this reduction. The NPD downgraded its estimate of the undiscovered resources by 530 MMcm to 3,400 MMcm oil equivalent after a review during spring 2003. Also, NPD has re-evaluated the potential from possible future measures for improved recovery. This potential is expressed by the goal of reaching an average recovery of 50% for oil fields and 75% for gas fields. The new NPD estimate is a potential of 400 MMcm of oil equivalent.

The estimate of the undiscovered resources at the year-end is equal to that presented in the report. The estimate is 1,160 MMcm oil, 340 MMcm condensate, and 1,900 bcm gas, a total of 3,400 MMcm oil equivalent.

This is 26% of the total petroleum resources including what has been produced.

The remaining total recoverable resources are estimated to be 9.1 bcm oil equivalent.

In 2003, 166 MMcm oil, 73 bcm gas, 11.4 million tons NGL, and 12 MMcm condensate, totaling 263 MMcm oil equivalent were sold and delivered. This is the largest total production from the Norwegian Continental Shelf since production started in 1971.

Eleven new discoveries were made in 2003. The new discoveries are expected to hold 22 - 80 MMcm of oil, 36 - 69 bcm of gas, and 7 - 9 MMcm of condensate. The volume discovered in 2003 is 40% of the produced volume during the same year.

As of Dec. 31, 2003, there were 64 fields on the Norwegian continental shelf with approved plans for development and operation (PDO), including 12 fields where production has ceased. Forty-eight fields were on production (42 in the North Sea and six in the Norwegian Sea), and four fields have not yet started production. Production started last year in the Fram and Grane fields in the North Sea and the Mikkel field in the Norwegian Sea.

At year end, the PDO for 6305/5-1 Ormen Lange was being treated, and an application for PDO exemption for 34/10-47 S Gulltopp was likewise treated.

Eighty-three discoveries are reported under other fields or discoveries.

According to approved plans for production, the expected average oil recovery on the Norwegian continental shelf is 45%.

03/15/04