June 9, 2008 / 8:30 AM / in 11 years

Alvheim oil/gas field in N.Sea brought on stream

OSLO, June 9 (Reuters) - Production has begun at the Alvheim oil and gas field in the Norwegian part of the North Sea, minority partner Lundin Petroleum AB (LUPE.ST) of Sweden said on Monday.

Alvheim, operated by U.S. producer Marathon Oil Corp (MRO.N), contains recoverable reserves of 25.5 million barrels of oil and 5.6 billion cubic metres of natural gas.

The resources will be tapped with a floating production, storage and offloading (FPSO) vessel with capacity of 120,000 barrels of oil per day and 125 million cubic feet per day of natural gas, Lundin said.

The oil will be transported by shuttle tankers and the natural gas will be taken into the existing British system through a new 38 km (23-mile) cross-border pipeline.

The FPSO at Alvheim also serves as a hub for the nearby Vilje field and will also be tied to the Volund development, which is due on stream in the second half of 2009.

“Gross plateau production is expected to be about 90,000 barrels of oil equivalent per day and we have 15 percent of that,” Lundin spokeswoman Maria Hamilton said.

Marathon owns 65 percent of Alvheim licence, U.S. ConocoPhillips (COP.N) 20 percent and Lundin 15 percent. (Reporting by Wojciech Moskwa; editing by James Jukwey)

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