Marathon Petroleum Company and Lundin Petroleums announced that the Volund development offshore Norway has achieved first production.

"This is a very proud day for Marathon as it marks completion of our second major field development project in Norway, and within only 15 months of starting up Alvheim operations," said Kristin Faerovik, managing director of Marathon Petroleum Company (Norway) LLC. "Volund is the second tie-back to the Alvheim floating, production, storage and offloading (FPSO) vessel, following Vilje; and it firmly establishes the FPSO as a new oil processing hub in the Norwegian Continental Shelf.

Volund is an oil field located south of Alvheim. The sea depth in the area is 120 - 130 metres. The field is being developed with three subsea wells connected to Alvheim. The reservoir is sandstone intrusions in the Balder formation of Eocene age at a depth of about 2 000 metres.

"Current oil production from the Alvheim FPSO is approximately 140,000 gross barrels per day (bpd), which is about 20,000 bpd greater than nameplate capacity -- another great success story," Faerovik said. "This exceptional performance means that the facility is already being fully utilized, resulting in the first Volund well functioning as a swing producer until there is some natural decline in the Alvheim fields, likely by the middle of 2010."

"First production from the Volund field is good news for Lundin Petroleum. As Alvheim is producing above forecast we will have to wait until 2010 for plateau production from Volund. However Volund will ensure that Lundin Petroleum continues todeliver production growth in 2010.", said Ashley Heppenstall, President and CEO of Lundin Petroleum

The Volund field is expected to reach a peak oil production of approximately 25,000 bpd gross (16,000 bpd net to Marathon), the timing of which is subject to available processing capacity on the Alvheim FPSO.

The Volund field is located in block 24/9 of the Norwegian sector of the North Sea, approximately 8 kilometers (5 miles) south of the Marathon operated Alvheim field, and is covered under Production License PL150. Marathon holds a 65 percent working interest in Volund and serves as operator, while Lundin Norway AS holds the remaining 35 percent working interest.

Marathon holds a 65 percent operated interest in the Alvheim field and associated FPSO, and a 47 percent outside-operated interest in Vilje. Lundin Petroleum holds a 35 percent working interest in Volund.

Tags: Lundin Petroleum, Marathon Oil Corporation