Statoil And Norsk Hydro Ready To Limit Supply If Needed

Norway's two top oil producers said yesterday they were poised to tighten the taps to meet Oslo's 150,000 barrels a day production cut for the second quarter.

"We will decide towards the end of the month which fields that we have to reduce production from in order to avoid overshooting the limit set by the ministry," Statoil's spokesman Kristofer Hetland told Reuters.

Hetland said Statoil, Norway's biggest producer, had not decided whether to shut down a few fields completely or reduce flow at several fields to meet the curbs. He confirmed that Statoil will abide by the promised reductions for its offshore fields.

Non-Opec Norway said late last year it would cut its total oil output to an average 3.02 million barrels per day (bpd) in the first two quarters of 2002 as part of an Opec-led initiative to support ailing oil prices, reviewed on a quarterly basis.

Operators pumped at full capacity until the last two weeks of the first quarter before putting on the brakes to safeguard against unscheduled disruptions that could leave companies trailing behind their quotas.Production for April, the last month for which figures are available, totalled 3.16 million bpd.

Number two producer Norsk Hydro echoed Statoil's promise to keep in line with the output restrictions set by the Oil and Energy Ministry, adding that its production plans for the last part of June called for both reductions and brief shutdowns.

Spokesman Dag Ryen Ofstad told Reuters that Norsk Hydro planned to trim output at Troll B by 60,000 bpd in the period 19-29 June, and another 60,000 bpd at Troll C between 22-29 June.

It also planned a shutdown of the 50,000 bpd Brage field from June 25 and the 40,000 bpd Visund from June 25 or 26 for the rest of the month, Ofstad said, adding that plans could also include a possible one-day halt at the 70,000 bpd Tordis.

Exxon Mobil, which operates the small Jotun and Balder fields, said it will not cut back as its fields were currently producing at a reduced rate. Neither Phillips, BP or Shell were immediately available for comment.

Norway's oil ministry, which gave operators a five per cent flexibility from the output limits at individual fields in the first quarter to provide some room for manoeuvre, said it had increased the leeway to 10 per cent for the second quarter.

Oil ministry spokeswoman Sissel Edvardsen said the added flexibility was a "pure technicality" to ensure that Norway did not fall below its 3.02 bpd target.

"We saw that there was room for increasing the flexibility to 10 per cent in order to meet the 3.02 million bpd target," Edvardsen said, adding that the ministry was confident it would meet the production limit for the second quarter.

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&to=http://www.statoil.com/' target=_blank>STATOIL

&to=http://www.hydro.com/' target=_blank>Norsk Hydro