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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)
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To: Tomas who wrote (323)10/1/1997 8:47:00 AM
From: balisurf   of 2742
 
Thomas,

I appreciate you passing on the information obtained from Sands.

I agree that things will probably sort themselves out with regard to timing of phase 2 development but there are some strong political forces at work in the JDA area. PetroVietnam has 12.5% of PM-3; however, they have an approx. 65% interest in the adjacent Fina block. Their position is that production should have started concurrently from the Bunga Kekwa field after resolution of who owns what percentage of the field's reserves. It is speculated that PetroVietnam is playing "hardball " with Petronas as the Malaysian national oil company is attempting to bring the Ruby discovery onstream in the Mekong Basin of Vietnam-the original intent was to "fast track" this field-->hasn't happened. This, combined with the 6 month delay in the official Vietnamese government approval of Petronas assuming operatorship of Dai Hung from BHP suggests some "back room" arm twisting.

The possibility that a PM-3 partner gives up a higher percentage to PetroVietnam as an incentive to quick resolution of the unitization process (and therefore phase 2 development) is highly likely. Upside, as you stated, is that these types of fields in both Malaysia and Thailand tend to grow with drilling rather than shrink due to the complex stratigraphic nature of the trap. A 30% increase in reserves along the flank is not unreasonable as Unocal has seen in their dominantly gas and condensate fields to the north.
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