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Reuters: Norway lets Shell restart Draugen oil production

OSLO, Oct 16 (Reuters) – Norway’s oil safety authority has let Royal Dutch Shell (RDSa.L: Quote, Profile, Research) restart production at the Draugen oilfield, after halting it pending improvements to lifeboats, but has not allowed Statoil (STL.OL: Quote, Profile, Research) to resume output at the Snorre field.

Shell is operator at Draugen, which produces 80,000 barrels of oil equivalent per day (boepd).

“The Petroleum Safety Authority Norway (PSA) has given Shell a dispensation such as it may restart the device (platform),” it said in a statement on Monday.

The PSA said it had not found grounds to give Statoil a similar dispensation for its Snorre A field.

The authority had ordered the companies on Friday to halt production at the fields, which are both on the Norwegian continental shelf, due to a lack of approved lifeboats.

“Shell has during the weekend given additional information that describes further compensating measures,” it said in a statement.

Its said Shell’s dispensation would last until the lifeboats were upgraded to allow staff to be evacuated in accordance with the rules, and this should be achieved by Dec. 1 at the latest.

Draugen’s main shareholders are Shell, with 26.2 percent, Norway’s state-owned Petoro with 47.9 percent and BP (BP.L: Quote, Profile, Research) with 18.4 percent.

The PSA said Statoil had also submitted new information on proposed steps to resolve the issues with its lifeboats, but added: “The PSA does still not find grounds for changing its earlier decision concerning this device.”

Statoil said on Friday that it had started work on lifeboat improvements and production would be out for seven to 10 days. Statoil, Norway’s largest energy group, said on Friday the Snorre shutdown would affect about 200,000 boepd, including losses at the tied-in Vigdis field.

Statoil has 15.6 percent of Snorre, whose other major owners are Petoro with 30 percent, Norsk Hydro (NHY.OL: Quote, Profile, Research) with 17.7 and U.S. Exxon Mobil (XOM.N: Quote, Profile, Research) at 11.2 percent.

© Reuters 2006. All Rights Reserved.

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