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Russian Billionaire Invests in Norwegian Gas Field

Dvalin

By MarEx 2016-10-03 18:46:44

Oil and gas firm DEA, controlled by Russian billionaire Mikhail Fridman and headquartered in Hamburg, will invest 10 billion Norwegian crowns ($1.26 billion) together with three partners to develop Norway's Dvalin natural gas field, the company said in a statement on Monday.

The field development had previously been postponed while the owners sought to cut the cost amid low crude prices.

The Norwegian Sea field, formerly known as Zidane, is expected to produce 18.2 billion cubic meters of natural gas and first output is expected in 2020, the firm said on Monday, as it handed in the development plan to Norwegian authorities. 

The Dvalin field is located in PL435, blocks 6507/7/9 and 6507/8 in the Norwegian Sea, approximately 15 kilometers north west of Heidrun and 290 kilometers from Nyhamna.

Dvalin will be developed with a four wells subsea template, which is connected to the Heidrun platform. At Heidrun, the gas will be partly processed in a new module, before the gas is transported in a new export pipeline to Polarled, going to the Nyhamna onshore gas terminal. At Nyhamna, the gas will be processed and transported to the European market.

Dvalin is DEA’s first development as field operator in Norway.

"Over the last few years we have managed to reduce cost by more than 20 percent," Hans-Hermann Andreae, DEA Norway chief said in a statement. Fridman's investment vehicle LetterOne controls DEA, which operates the field.

Austria's OMV currently has a 20 percent stake in the license but has entered into a deal to sell its stake to Norway's state-owned Petoro.

The other partners are Maersk Oil, the energy arm of shipping giant A.P. Moeller Maersk, and Edison of Italy.

New investments offshore have sharply declined as oil firms look to restrict spending amid the slump in oil prices.

Investment in the Norwegian oil sector, a key driver of economic activity, will fall to 150.5 billion Norwegian crowns ($18.90 billion) in 2017 from 163.5 billion crowns this year, according to forecasts compiled by Statistics Norway.