Lundin considers options for Luno

Lundin Petroleum will participate in five development projects in Norway this year, incurring a total net capital cost of $2 billion.

Offshore staff

STOCKHOLM, Sweden -- Lundin Petroleum will participate in five development projects in Norway this year, incurring a total net capital cost of $2 billion. According to CEO Ashley Heppenstall, these schemes should double the company’s current production within the next five years to over 60,000 boe/d.

The largest project for Lundin is the Luno field development in the southern Norwegian North Sea, where recoverable reserves were upgraded last year from 95MMboe to 148 MMboe.

Conceptual development planning has been completed, and Lundin is preparing to start front-end engineering studies prior to submitting a development plan later this year.

But the company also is finalizing studies with Det norske Oljeselskap, operator of the nearby Draupne field, to determine whether a joint Luno/Draupne development would make more sense than two standalone projects. Consultations should be completed by end-March, when a choice will be made.

Elsewhere in the Norwegian sector, the 31MMboe BG-operated Gaupe field development should come onstream before year end, adding 5,000 boe/d to Lundin’s production. And Lundin is finalizing commercial terms with Shell for tieback of the Nemo field to the Pierce FPSO on the UK side of the North Sea median line, to be followed by submission of the development plan. Conceptual studies continue for development of the Krabbe and Marihøne fields, the latter discovered last year by operator Marathon.

This year, Lundin should participate in 10 appraisal and exploration wells offshore Norway including five wells in the Greater Luno Area, and two exploratory wells in the Barents Sea.

Last December, the company discovered commercial hydrocarbons in license PL338 on the Apollo prospect, 5 km (3.1 mi) from Luno, with estimated recoverable reserves in Palaeocene and Cretaceous reservoirs of 15-65 MMboe within the license. Apollo will be appraised nest year, and likely developed through the Luno facilities.

Another exploration well last summer in PL501 found oil in the Avaldsnes prospect, which could contain 100-400 MMboe, with the fault-controlled structure extending west into PL265 where Statoil is operator.

Lundin plans to drill two appraisal wells on Avaldsnes during the first half of this year, while Statoil will also drill a well to test the extension into its license, which has been named Aldous Major South.

Avaldsnes has proven the migration of hydrocarbons to the eastern side of the Utsira High, increasing interest in exploration in the Greater Luno area. Drilling is already under way on the Tellus prospect in PL338, and further wells are planned next year in PL359 (WI 40%) and PL410 (WI 70%) in 2012.

03/09/2011

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