London (Platts)--14May2007

Norway's Norsk Hydro Monday said it has reduced its oil and gas
production target for 2007 by 3.3% to 585,000 b/d of oil equivalent to reflect
delays and shut-in on a number of Norwegian oil fields. 
     The reduction is a consequence of revised production forecast for several
non-Hydro-operated fields on the Norwegian Continental Shelf, including
Kvitebjorn, Kristin and Volve, the company said.
     Norway's Statoil, which operates the Kvitebjorn, Kristin and Volve
fields, last Thursday announced a cut in its 2007 production forecast from 1.3
million boe/day to 1.15-1.2 million boe/day. Hydro is set to complete the
merger of its upstream assets with Statoil in the third quarter.
     Statoil shut production at the Kvitebjorn field temporarily on May 1 to
allow for drilling of two further production wells. Output is expected to
resume in the fourth quarter of 2007, the company said last week. 
     At the Kristin field, production hike will be further delayed, Statoil
said. Work in the winter season was slower than anticipated due to a mix of
bad weather and technical challenges, it said, adding that it expected
production to plateau towards the end of the third quarter of 2007.
     Additionally, the Volve project is slightly delayed owing to late 
arrival and modification of the rig, Statoil said. This field is now expected
to start production in the third quarter of 2007.
     "We do not believe that this downgrade should come as a surprise to the
market," Citigroup said in a note. "These are exactly the same fields which
led Statoil to downgrade last week and we had expected to see a downgrade to 
585-590,000 boe/d to reflect this."
     By 08:32 GMT, Hydro's shares were trading 1% lower at NOK25.10 ($4.16) in
Oslo.
     Norsk Hydro has a 14% stake in Kristin, a 15% stake in the Kvitebjorn
field, and a 10% stake in the Volve field.
     The revised production target for 2007 was a result of delayed production
and had no impact on Hydro's oil and gas reserves, it added.