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Bloomberg: Statoil, Shell Say CO2 Use at Draugen Isn’t Commercially Viable

By Beate Evensen

June 29 (Bloomberg) — Statoil ASA, Norway’s largest oil producer, said a project with Royal Dutch Shell Plc to use carbon dioxide to increase production from the Draugen field offshore Norway wouldn’t be profitable.

The two companies have studied whether to use carbon dioxide, a greenhouse gas blamed for global warming, from a proposed natural-gas-fired power plant at Tjeldbergodden in central Norway to raise output at offshore fields by injecting the gas into the reservoirs.

“Use of CO2 for enhanced oil recovery on Draugen is not commercially defendable and thus will not make a positive contribution to the value chain,” Shell and Stavanger, Norway- based Statoil said today in a joint statement on Statoil’s Web site.

Gas-fired power production with carbon-dioxide capture “is currently not profitable” in Norway, Statoil said.

“The companies will during this autumn complete the technical studies on carbon capture, and continue to explore if there is a possibility to establish the gas power plant at Tjeldbergodden with CO2 capture and storage,” they said.

To contact the reporter on this story: Beate Evensen in Oslo at [email protected]

Last Updated: June 29, 2007 02:41 EDT

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