Marathon submits plan to develop Alvheim field

Ray Tyson

Petroleum News Houston Correspondent

Marathon Oil Corp., through its wholly owned subsidiary Marathon Petroleum Norge AS, and its partners have submitted a plan to develop and operate the offshore Alvheim field to the Norwegian Ministry of Petroleum and Energy.

Approval of the PDO is anticipated during the fourth quarter of this year and first Alvheim production is expected in early 2007, Marathon said July 30. Marathon holds a 65 percent interest in Alvheim and serves as operator.

The companies plan to develop the field using a floating production, storage and offloading vessel, or FPSO, with subsea infrastructure consisting of five drill centers and associated flow lines. The FPSO will be a conversion of the multipurpose shuttle tanker Odin for which the Alvheim group signed a purchase and sale agreement with Statoil earlier this year.

The PDO also outlines transportation of produced oil by shuttle tanker, transportation of produced natural gas to the United Kingdom through existing infrastructure and re-injection of produced water.

Alvheim is made up of the Kneler and Boa discoveries and the previously undeveloped Kameleon accumulation. The Alvheim field currently is estimated to contain resources of approximately 180 million barrels of oil equivalent.

Recently, the Alvheim group reached agreement to tie in the nearby Klegg discovery subject to the approval of a Klegg PDO. Production from a combined Alvheim-Klegg development is expected to ramp up to more than 50,000 net barrels per day during 2007.

The combined Alvheim-Klegg development is estimated to contain resources of approximately 200-250 gross million barrels of oil equivalent. In addition, the Hamsun discovery announced earlier this year is being examined as another possible tie-back to Alvheim.

Marathon’s partners in the Alvheim development are ConocoPhillips AS with a 20 percent working interest and Lundin Norway AS, which holds the remaining 15 percent interest. Norsk Hydro Produksjon holds a 28.531 percent interest in Klegg and serves as operator. Other Klegg interest owners are Marathon with 46.904 percent, Total E&P Norge AS with 24.243 percent, and AS Ugland Rederi with 0.322 percent.