Libya: Hunt is on for bigger prizes
Upstream, November 20
LUNDIN hopes to prove up significant additional quantities of oil on its NC177 concession alongside the En Naga development. An ongoing exploration effort should see its next well spudded before the end of the first quarter of 1999. There are potential structures close to En Naga, such as En Naga Northwest, while the company also believes there are deeper reservoirs still to be encountered below the En Naga field.
However, Lundin is likely to concentrate development work on the existing discovery and target its exploration drilling on NC177 at larger structures to provide it with future and hopefully bigger development prospects.
A 1600-kilometre seismic programme is close to completion but the company is already veering towards putting down a well on one of three larger structures to the south of En Naga known as Haruj A,B and C.
"We're extremely excited from a technical point of view", says exploration vice president Alexandre Schneiter. "This exploration potential is tremendous... we see structures that are significantly larger than En Naga".
Of course, the real test will come with the drilling of one or possibly two new exploration wells next year, but the issue of financing will have to be clarified first.
Lundin holds 40% of concession NC177 and its 58%-owned affiliate Red Sea Oil Corporation the rest. Red sea is a small, Calgary-based entity that has no cash in its own right. It will need further financing to pursue its involvement in NC177. For the moment, Lundin is carrying Red Sea's share of the costs and is now owed about $7 million.
However, officials confirm that the partner's position will have to be sorted out by the time the next exploration well is spudded. That issue is being addressed at the moment, with either an equity financing or a farm-out of possibly 20% of Red Sea's interest seen as the most likely route.
Officials insist, though, that they will not be giving any interest away, commenting that initial approaches about farm-ins had been pitched way too low. |
