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Lundin Oil<LOILb.ST>keeps options open on Arakis
By Paul de Bendern
STOCKHOLM, July 21 (Reuters) - Swedish oil company Lundin Oil AB said on Tuesday it was keeping all its options open on the future of Canada's Arakis Energy Corp <AKSEF.O> of which it is the largest single shareholder.
Arakis said last week it would consider putting itself up for sale after failing to raise about $200 million on foreign debt markets to meet its financial obligations in a part-owned $1 billion oil project in strife-torn Sudan.
Lundin Oil, which holds about 10 percent of Arakis share capital and has two directors on its board, would not comment on whether it was considering taking over the Canadian company.
"At this point we are not ruling anything out and we have not settled on any specific course of action," Lundin Oil managing director Magnus Nordin told Reuters.
But he said: "Given our interest in the area we would be interested in purchasing things at the right price."
Embattled Arakis, facing cash calls shortly from its partners in Sudan, has hired Canadian brokerage Midland Walwyn Capital Inc as financial advisers for any sale, acquisition or other corporate restructuring it may undertake.
Arakis's search for finance to back its 25 percent stake in the Sudan Petroleum Project would not threaten the survival of the project, Nordin said.
Arakis's partners in southern Sudan's Heglig and Unity oil fields and a 930-mile (1,500 km) pipeline to the Red Sea under construction are the China National Petroleum Corp, Malaysia state oil company Petronas and the national oil company of Sudan, Sudapet.
Nordin said Lundin was already active in Sudan. Its main interest is an exploration concession on block 5A which is adjacent to the Heglig field.
"Our primary stake is in block 5A where we have a direct interest and we are operators...with a view to drill our first new well around the new year," he said.
Nordin said Calgary-based Arakis was still important for Lundin.
"We view it as an interesting vehicle to get further concessions in the Sudan," Nordin said.
"Now they have said they cannot finance all their commitments, we will have to review what is the best way for us to maintain the exposure we wish to have in the Sudan."
Construction of the pipeline from the Heglig and Unity oil fields started in May.
The consortium is continuing to drill wells with the aim of pumping 150,000 barrels of oil a day next year.
Lundin Oil, which produces oil and gas in the North Sea, was formed through the recent merger of Swedish company Sands Petroleum and Canada's International Petroleum Corp.
Lundin is listed in Stockholm and also on the Toronto exchange <LOI.TO>.
17:28 07-21-98
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