INTERVIEW-Lundin may start Libya oil output in '99
LONDON, May 14 (Reuters) - Swedish firm Lundin Oil (LOILb.ST) said on Thursday it may start pumping crude at its Libyan En Naga North field next year pending official approval of its development plans. ''We are hoping to get the development plan approved before the end of this year and will implement it as soon as possible,'' managing director Magnus Nordin told Reuters by telephone from Stockholm.
The company, with interests in the North Sea and Malaysia, would see its total crude oil output double to some 30,000-35,000 barrels per day (bpd) once the Libyan field comes on stream. The company recently announced it has discovered reserves of around 84 million barrels of light, good quality oil at the field which lies inland near the Gulf of Sirte in north-eastern Libya.
The project could kick off with production of up to 20,000 barrels a day but the final level would depend on the development plan, said Nordin. Lundin is to carry out more appraisal wells on the site this year. He said the oil would be fairly easy to export as the field, in the northern part of Block NC 177, lies around 60 km from an existing pipeline.
Lundin owns 40 percent of the block and its subsidiary Red Sea Oil Corporation (RSO.AL - news) has the remaining 60 percent. Lundin, formed recently by a merger of Canadian and Swedish registered companies, owns over 60 percent of Vancouver-based Red Sea Oil.
The company is also carrying out seismic surveys this year in the southern section of the concession where initial tests have been promising. ''We only carried out seismic in the north last year, but it seems southern parts of the block have better prospects,'' he said, declining to say how much the firm would spend on the exploration.
The recently-formed Lundin now produces 15,000 bpd, with 85 percent of that output from its share in North Sea fields and the rest from an offshore project in Malaysia. The Swedish firm is one of a growing number of European companies keen to tap Libya's oil potential and to take advantage of the absence of U.S. firms who are barred by sanctions from investing in the North African country. Libya, in turn, is relying on projects with foreign partners to keep its crude oil capacity at between 1.4 million and 1.5 million barrels a day.
Production from state-run fields has stagnated as the trade sanctions prevent it from buying up-to-date technology to keep output at full capacity. Most of the projects were developed before the United States tightened existing unilateral sanctions against Libya by passing the Iran-Libyan Sanctions Act, which threatens sanctions against any company investing more than $20 million in either Libya or Iran. |
