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Last Updated: Friday, 7 December 2007, 23:49 GMT
Output worry hits Statoil shares
Statoil owned platform
Repair work has hit output
Shares in Norwegian energy giant Statoil Hydro have fallen 11% after it said a series of problems will see it miss production targets.

Difficulties at several gas fields will keep output below the firm's previous target of 1.735 million boe (barrels of oil equivalent) a day this year.

Daily production in 2008 is expected to rise only slightly to 1.75 million boe.

The news, which analysts said was a surprise, knocked $11bn (7.5bn euros; 5.4bn) off the value of the company.

'Disappointing'

Production at its Snohvit gas field in the north of the country has had to be temporarily suspended because of a water leak.

Meanwhile, the Kvitebjorn field has encountered problems with a gas pipeline and drilling difficulties have slowed output at the huge Ormen Lange gas field.

Analysts expressed dismay at the news, having expected production to increase by up to 10% next year, and the firm's shares fell 11% on the Oslo Stock Exchange.

"This is quite disappointing. The production volume is lower but investment and exploration costs are higher than expected," said Kjetil Bakken, an analyst with Fondfinans.

Statoil Hydro is majority owned by the Norwegian government and employs more than 30,000 people in 40 countries.

Statoil bought the oil and gas interests of Norsk Hydro in October.

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