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Bloomberg: Statoil, Shell Shutting Two Oil Platforms in Norway (Update4)

By Beate Evensen and Stephen Voss

Oct. 13 (Bloomberg) — Statoil ASA and Royal Dutch Shell Plc said they were immediately halting production at two oil and gas platforms off the coast of Norway, following an order from the country’s Petroleum Safety Authority.

The authority told the companies yesterday to close the Snorre A and Draugen platforms because faulty lifeboats reduced their evacuation capacity. They kept pumping oil until again ordered to stop today, when the regulator reiterated it wouldn’t allow them an exemption. The closings affect 280,000 barrels of oil a day, or about a 10th of the country’s oil output, according to Statoil and Norway’s Petroleum Directorate.

“We took direct contact with the companies and made it clear that the consequence of our decision is immediate closure,” the safety regulator said in a statement on its Web site today.

Statoil will starting shutting Snorre A “immediately,” company spokesman Jone Stangeland said today by phone. “It will take around five to six days to shut down the field’s complete production.”

Shell “is in the process of shutting” Draugen, which will be completed later today, Geir Haug, a Shell spokesman in Norway, said by telephone. The company is working on modifying lifeboats, which will take one to two weeks, he said.

Platform Output

Snorre A, in the North Sea, pumps about 110,000 barrels of oil a day and also gets about 90,000 barrels a day from the nearby Vigdis field. The Draugen field in the Norwegian Sea, operated by Shell, produces about 80,000 barrels of oil a day.

The decision yesterday came after a report found a particular type of lifeboat wasn’t strong enough to be dropped from the platforms to the sea.

Eight offshore installations have 39 of the boats, Norway’s oil industry association said two days ago. The other six were allowed to continue operations because they could lower the boats instead of dropping them, according to the safety authority.

Shell owns 26.2 percent of Draugen, which has been in production since 1993. The remainder is owned by Petoro AS, BP Plc and Chevron Corp.

Norway, Europe’s largest oil producer, pumped about 2.75 million barrels of oil a day last month, according to the International Energy Agency.

To contact the reporters on this story: Stephen Voss in London at [email protected] ; Beate Evensen in Oslo at [email protected]

Last Updated: October 13, 2006 07:23 EDT

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