COPENHAGEN, Norway – DONG Energy has agreed to buy out Noreco's 50% interest in the Siri field in the Danish North Sea for around $13 million.
The agreement is subject to Danish regulatory approvals, but DONG expects all conditions to be resolved before year-end.
This would free DONG to implement its preferred repair solution for cracks in parts of the Siri platform's subsea support structure, first identified in 2009, which caused production to be temporarily closed down.
The price takes into account revenues and expenses DONG will take on related to Noreco's share of the Siri license, and contributed costs for repairing the subsea structure.
DONG estimates the total repair bill at around $385 million, which will be spread over 2011 and 2012. DONG’s increased operating costs this year will be only partly offset by its increased share of production from the Siri field.
DONG stresses that this agreement does not cover satellite fields outside the Siri license. In 2010, the Siri field and Stine satellite, both within the Siri license, produced 1.8 MMbbl of oil.
Noreco will remain as a partner in the satellite fields Nini East, Nini, and Cecilie.