LONDON�Lundin Oil AB said Monday its board had approved a capital budget of $108 million, up 46% over last year. The bulk of the money will be spent on the company's development activities in Libya and the Asia-Pacific area.
The Swedish company plans to spend $83 million on its En Naga oil development on Area NC177 in Libya, where exploration is ongoing, and the Phase 2 oil and gas project on Block PM3 CAA off Malaysia/Vietnam.
Once on stream later this year, those two developments are expected to give a significant boost to Lundin's production, currently 14,100 b/d.
"Both projects are in full swing and will generate significant production increases for the company starting late this year," said Lundin Pres. Ian H. Lundin. "We have discovered significant hydrocarbon reserves in both Malaysia and Libya, and we have now successfully dealt with all the major issues concerning the projects. We have the operational and financial capacity to complete these projects."
The remaining $25 million in the budget will support the company's exploration and appraisal program, which will have a "strong focus" on Block 5A in Sudan, where Lundin is "gearing up for an active drilling and seismic campaign."
Plans are underway to shoot 3D seismic on the recently awarded Block PM305 off Malaysia this year, followed by an appraisal well on the Ophir discovery, said Lundin.
Lundin Oil will drill the East Raya exploration well on Block PM3 CAA after the completion of two development wells in Bunga Kekwa field, which was producing 14,700 b/d. That was expected to rise to 17,000 b/d when additional development wells are brought on stream.
