Lundin Petroleum: 2013’s $1.7 billion budget to focus on Norwegian projects

Posted on 09 January 2013

Swedish oil and gas company Lundin Petroleum this week announced a US $1.7 billion budget for its 2013 development, appraisal and exploration activities, which represents a 150% increase over the 2012 budget. The company expects it to be the busiest year in its history, both in relation to exploration and development activities. Exploration activity accounts for $460 million, approximately a 40% increase over the 2012 exploration expenditure forecast. The budgeted 2013 appraisal expenditure amounts to $150 million against a similar 2012 appraisal expenditure of approximately $150 million.

“I am very pleased that all our Norwegian development projects are on schedule and that we still are on target for a doubling of our current production to in excess of 70,000 boepd by the end of 2015,” Ashley Heppenstall, president and CEO of Lundin Petroleum, commented. “The appraisal of Johan Sverdrup is progressing well, and by the end of 2013 it is likely that at least 18 exploration and appraisal wells will have been drilled on the discovery. Importantly we have secured the rig capacity to execute on our 16 exploration and appraisal well program in Norway during 2013, and I am confident that this program will prove up yet more resources.”

Substantially, all of the 2013 budgeted development expenditure relates to ongoing development projects in Norway:

• The development of the Edvard Grieg field, where Lundin Petroleum is operator, commenced in 2012. The 2013 net expenditure is budgeted at close to $550 million, which will involve ongoing engineering and construction of the jacket, topside and export pipelines.

• The development of the Brynhild field, also operated by Lundin, is progressing well, and first production is scheduled in Q4 2013 at a net plateau rate of 10,800 bbl/day of oil equivalent. The 2013 net development expenditure is budgeted at approximately $470 million, which includes topside modification of the Haewene Brim FPSO, subsea facilities construction and installation and the drilling of production and water injection wells.

• The non-operated Bøyla field, which will be tied back to the Alvheim FPSO, received development approval in 2012. The 2013 net development expenditure is budgeted at approximately $40 million, which predominantly involves engineering, procurement and fabrication of subsea and topside equipment. The field is scheduled to come on-stream in Q4 2014 at a net plateau rate of approximately 3,000 bbl/day of oil equivalent.

The exploration budget for 2013 is $460 million, also with a major focus on Norway, accounts for approximately 70% of the total. The exploration program, excluding appraisal, involves the drilling of 18 exploration wells in Norway, Malaysia, Indonesia, France and the Netherlands.

• Norway – The budgeted net exploration expenditure for 2013 is $330 million. A total of 10 exploration wells will be drilled in Norway during 2013. A significant proportion of the 2013 exploration expenditure will be focused around the Utsira High Area, with six exploration wells targeted in the area, on PL625, PL338, PL359, PL544, PL501 and PL410, all of which are operated by Lundin. Two exploration wells will be drilled in the Southern North Sea on PL495 and PL453, both of which are operated by Lundin. One operated exploration well will be drilled in the Barents Sea on PL492, and one non-operated exploration well will be drilled on PL330 in the northern part of the Norwegian Sea.

• Southeast Asia – The budgeted net exploration expenditure for 2013 is approximately $115 million. Three exploration wells will be drilled in Malaysia, of which two will be drilled offshore Peninsular Malaysia and one well offshore Sabah. Two exploration wells will be drilled offshore Indonesia, on the Baronang and Gurita licenses, respectively.

The appraisal budget for 2013 is $150 million, with approximately 95% of the expenditure being spent in Norway. The appraisal program involves the drilling of six appraisal wells in Norway and pre-investment decision work on the Bertam field in Malaysia.

•  Norway- The budgeted net appraisal expenditure for 2013 is $140 million, with all the appraisal activity taking place on the Johan Sverdrup discovery and on PL338. Four appraisal wells will be drilled on the Johan Sverdrup discovery in 2013, two on PL501, operated by Lundin, and two on PL265, operated by Statoil. Two appraisal wells will be drilled on PL338, including one appraisal well in the southeastern section of the Edvard Grieg field.

• Malaysia – The budgeted net appraisal expenditure for 2013 is $10 million, relating to assessing the viability of the Bertam field in PM307, ahead of a final investment decision in 2013. If the Bertam field development moves forward, additional development costs will be incurred.

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 16 April 2014

    Maersk Drilling takes delivery of ultra-deepwater drillship

    Maersk Drilling has taken the delivery of its second drillship, Maersk Valiant from the Samsung Heavy Industries (SHI) shipyard in Geoje-Si, South-Korea. Maersk Valiant has begun its voyage toward the...

  • 16 April 2014

    Ensco orders new jackups from Lamprell

    Ensco has ordered two high-specification jackups, ENSCO 140 and ENSCO 141, for delivery in mid-2016 from Lamprell’s shipyard in the United Arab Emirates. The rigs will also...

  • 16 April 2014

    MPD/UBD successfully drills sidetrack after 6 failed conventional drilling attempts

    In the Brookeland Field in East Texas, conventional drilling methods failed in six attempts to drill a “straightforward” horizontal wellbore. The original well had surface casing installed...

  • 16 April 2014

    Chevron’s DGD training program serves array of learners across generations

    Since 2008, more than 400 people – from operators, drilling contractors, service companies and regulators – have completed Chevron’s dual-gradient drilling (DGD) training...

  • 16 April 2014

    Pacific Drilling integrates ‘disruptive’ DGD technology into 7th-generation drillship

    A disruptive technology is one that “gets its start away from the mainstream of a market and, then, as its functionality improves over time, invades the main market,” as defined by Harvard...

  • Read more news