CARGO / BALLAST AUTOMATION: Baobab lifts Svenska’s profits and production

Start-up of the Baobab field off Côte d’Ivoire last year has given a boost to Swedish independent Svenska Petroleum Exploration. Baobab doubled the company’s production, lifting its gross profit this year to a probable record of SEK 1 billion.

As a result, Svenska has become one of Sweden’s most profitable companies. Last year’s revenues, aided by rising oil prices, rose 94% to SEK 1.7 billion; with pre-tax profits of SEK 814 million, that represents a profit margin of 49%. Furthermore, according to managing director Sven-Erik Zachrisson, the company has recovered its SEK 1.6 billion investment in Baobab within a year of start-up.

Baobab, a deepwater field operated by Canadian company CNR International, came on stream in August 2005 through an FPSO and has produced at around 50,000 boe/d, somewhat lower than expected due to sand production problems. Svenska’s 27% share in the license equates to around 13,700 boe/d. Field reserves are estimated at 192.5 MMbbl of oil and 64.6 bcf of gas.

On the same license is the Kossipo find, with estimated reserves of 40 MMbbl. Although too small for stand-alone development, this likely will be phased in through theBaobab FPSO when spare capacity emerges. Baobab is the dominant asset in Svenska’s portfolio, accounting for 44% of its production in 2005 as a whole and 74% of its reserves at the beginning of the year. Its next major asset is the Ula Field in Norway, where it has a 15% stake. Ula is responsible for 25% of the company’s production and 17% of its reserves.

Zachrisson sees Baobab as providing a platform for the company’s further growth. Over the next five to six years it plans to invest SEK 4-5 billion to increase production to around 30,000b/d, he says.