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26. September 2007

Norsk Hydro CEO says can't rule out major aluminium acquisitions by his group

OSLO -- Norsk Hydro ASA chief executive Eivind Reiten said he could not rule out future major acquisitions by his group in the aluminium sector.

Norsk Hydro has merged its oil and gas operations with Statoil in a deal that takes effect on October 1, after which Hydro becomes a pure aluminium producer.

Reiten told a press briefing in Olso that he saw his aluminium group becoming a major international player, both with organic growth and possibly via acquisitions.

He said that strategically his group's ambitions were to be a 'significantly bigger' aluminium production in 2010, 2015 and following years.

'That means significant growth and investment over the years. Whether that means expansion in Norway, Australia...or an acquisition, depends,' Reiten said.

'We are working on expanding organic growth... in the meantime, on the radar screen, we are looking for opportunities to acquire.' On the upstream side, Hydro was more likely to see organic growth than any 'huge acquisition,' Reiten said. 'But we never rule it out. On the downstream side it's more likely that we will see selective acquisitions.'

Reiten will be chairman of StatoilHydro, but will remain CEO of Norsk Hydro.

Earlier this month Norsk Hydro announced it will boost capital expenditure to up to 12 bln nkr, nearly double the current levels, and it will expand aluminium production aggressively.

The group said its capital expenditure, including debt-financed projects in joint ventures, is expected to rise to 11-12 bln nkr in 2008 and 2009, up from 6.5 bln nkr in 2007.

About 80 pct of the 2008 and 2009 investments will be made in the upstream aluminium business.

Major projects in 2008 include the Qatalum aluminium project in Qatar and the completion of the Alunorte 3 expansion in Brazil.

Norsk Hydro's primary aluminium production is expected to be 1.73 mln tonnes in 2007, rising to about 2 mln in 2011, the first year of full production from Qatalum.

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