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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Tomas who wrote (730)	9/2/1998 5:05:00 PM
From: Greywolf	Read Replies (1) of 2742

Minutes from a meeting on the 1/9 with Magnus Nordin CEO Lundin Oil. The current reserves are; The UK 24,3 MB, Malaysia 175,4 MB and Libya 64,4 MB. Seismic is still being shot in the Sudan and Libya. As stated in the half year report the current production is up by 72% from last year. The company expects the reserves to at least dubbel in the next 12 month's. The increase will come primarilly through Malaysia and Libya. I find this to be conservative The production capacity is in Malaysia expected to increase by up to 70% during the second half of 98. In the PM-3 field some 40 plus new structures have been identified as possible oil bearing. From SEP 98 4 wells will be online for production in Malaysia and by the end of the year the total should be 5. The total cost is $700 million of which Lundin pays 41%..you work it out. The gas contract with Vietnam and Malaysia as Tomas has pointed out earlier is on the table ripe for signing and it is Vietnam that is draging it's feet. Oil is being produced in the part of PM-3 that stradles the Vietnam border owned by Petrofina Yet Petrofina are paying Lundin's costs for transporting oil by tanker in the interim period until a pipeline can be built. Production from the Orchid field is not due to come online until 2003-2004. As far as Libya goes this region was risky at best but with the new easing of sanctions not more than a formality things are looking up. As Magnus Nordin said "if the sanctions had not come into effect which eliminated the Americans we would not have been able to be in the region - because of the competition". Enough said as far as the potential of the Libyan operation The southern part of NC177 is almost at the end of the test period and between 4-10 possible oil bearing structures have been detected Why the diff is so large ie 4-10 is not known as I was not at the meeting Re-testing of the old field's from 1968 held by the Italians is under way MN feels there is a good chance for oil find's there...Libya will be on the fast track during the next 1-2 years and with sanctions being lifted it is feelt that this will speed up accordingly. Libya is at the moment producing at a deficit to their quota so any production from RSO would not be hampered by this.... As far as the Falklands goes SHELL is still on the platform and SODRA will only know about a week before it is thier turn. My latest info is that the testing equipment sent to the Falklands is such that it is only used when you have found oil MN gave different odds on finding oil off the southern Islands yet they are what they are odd's and as such rather academic. As to when SHELL comes clean about the situation is up to them and we just have to wait. The Sudan block 5A is to drilled from January 99 and 500 Chinese technicians are currently biulding the pipeline.

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