Lundin sets $310 million E&D budget

Jan. 11, 2006
Lundin Petroleum AB, Stockholm, has allocated $310 million for exploration and development spending in 2006.

By OGJ editors
HOUSTON, Jan. 11 -- Lundin Petroleum AB, Stockholm, has allocated $310 million for exploration and development spending in 2006.

Of that amount, more than $200 million is earmarked for development, concentrating on projects in Norway and Tunisia.

Off Norway, Lundin is scheduled to begin development drilling this year in Alvheim area oil fields, which are expected to come on stream in early 2007 at a forecast production rate of 85,000 boe/d (OGJ, Aug. 22, 2005, p. 36). Modifications to the Alvheim floating production and offloading vessel in Singapore are nearly complete, Lundin said.

Lundin's 50%-held Oudna oil field off Tunisia is forecast to begin production in late 2006 at a rate of 20,000 b/d of 41° gravity oil from two intervals in the Miocene Lower Birsa sandstone (OGJ Online, July 3, 2003). The Oudna project involves the relocation and modification of the Ikdam floating production, storage, and offloading vessel, which is currently in the late-life Isis oil field (see map, OGJ, July 18, 2005, p. 32). Development drilling on Oudna will start in the first quarter of 2006.

The development funds covers the completion of reactivation of the drilling rig on the Heather oil field platform in the UK North Sea in the first half of 2006 followed by a drilling and workover program. Also supported is a four-well infill drilling program in Villeperdue oil field in the Paris basin.

Lundin expects to produce 36,000 boe/d in 2006, compared to an estimated 33,000 boe/d in 2005. The company believes production will reach more than 50,000 boe/d in 2007 when the Norwegian and Tunisian new field developments come on stream.

Lundin will increase its 2006 exploration spending to more than $100 million, up more than $50 million over 2005. A total of 15 exploration wells are planned in 2006 targeting an unrisked reserve potential of more than 750 million bbl, five times greater than the company's current reserves. The company plans multiwell drilling programs in Norway, Sudan, and Indonesia with further exploration drilling planned in France, the Netherlands, and Ireland.