Oil company Det Norske Oljeselskap has penned a “Heads of” agreement with an unnamed contractor for the lease of a jack-up production unit for the “little” Frøye field offshore Norway.

The License 364 project is expected to produce 56 million barrels of oil for Premier and Det Norske's 55-50 partnership starting at 28,000 barrels of oil per day.

“With today`s oil prices, the project is estimated to generate a net present value of NOK 4 billion,” company chief exec Erik Haugane said in a statement. The contractor will build the unit ahead of start-up in the autumn of 2012, and then operate it for 10 or more years.

“The lease rate varies according to the production profile and is of considerable value,” a statement said.

In January 2008, license partners began preparing a plan for parliamentary approval.

Det norske is the “second-largest” operating company on the Norwegian continental shelf with 24 fields and 46 blocks.

Tags: Det norske oljeselskap ASA