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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Greywolf who wrote (2331)	4/27/2001 11:00:37 PM
From: Tomas	Read Replies (3) \| Respond to of 2742

Lundin Oil: Petronas, partners acquire Cai Nouc Development Area Business Times (Malaysia), April 27 BY KAMARUL YUNUS PETROLIAM Nasional Bhd (Petronas), through a joint venture, has acquired a combined interest in the Cai Nouc Development Area, off the shore of Vietnam. Petronas, through Petronas Carigali Overseas Sdn Bhd (PCOSB), Lundin Oil AB and Petrovietnam E&P (PVEP), had concluded the purchase agreement recently with TotalFinaElf, a subsidiary of Fina Exploration Minh Hai B.V. and PTTEP International Ltd for the Cai Nuc Development Area. Under the terms of the agreement, Lundin Oil will act as the operator for the group, with a 33.2 per cent interest, while PCOSB and PVEP will be holding the remaining 36.8 per cent and 30 per cent, respectively, subject to the Vietnamese Government approval. In its website, Lundin Oil said the area contained a united portion of the Cai Nuoc/Kekwa field, which produces about 18,000 barrels of oil per day (bpd). The reserves within the area will be developed as part of Phase 2 of the PM-3 Commercial Arrangement Area (CAA) scheduled to come on stream late in the third quarter of 2003 at a total rate of 250 million cu ft of gas and 40,000 bpd. The inclusion of the area in the overall project means that production rates will probably increase once a market has been secured for the gas reserves within the CAA. Lundin Oil president Ian Lundin was quoted on the website as saying that the latest asset would add significant proven oil and gas reserves to the company's existing South-East Asia portfolio. "The fact that the same partners have an interest on both sides of the border between Malaysia and Vietnam, means that the Kekwa/Cai Nuoc field will be developed in the most cost-efficient and effective manner," he said. Prior to the acquisition, the joint venture company completed a production enhancement programme at Phase 1 of the Kekwa oil field located between Malaysia and Vietnam, which resulted in a 30 per cent increase in production rates from the area. With a gross area of 1,407 sq km, the production in the oil field (known as PM-3 CAA) will increase to about 18,000 bpd from the current 14,300 bpd. Lundin Oil is the operator of the PM-3 CAA with a 41.1 per cent stake in the joint venture. Its partners are PCOSB (46.06 per cent) and PVEP (12.5 per cent). PM-3 CAA is located between Malaysia and Vietnam in the South China Sea. During the 1990s Lundin Oil and its partners drilled 20 wells and discovered seven oil and gas fields. Production commenced in 1997 with the implementation of Early Production System (Phase 1). Full development of the reserves is now proceeding under Phase 2. The block is in a strategic location with good access to the growing gas markets of both Malaysia and Vietnam. Initially, all the gas (250 million cu ft per day) will be sent to Peninsular Malaysia. The project included the drilling of two new development wells and the work on the four existing wells. The two new development wells, BK-A8 and BK-A9, tested 5,880 bpd and 4,375 bpd, respectively. According to Lundin Oil, the company has embarked on a major development project known as Phase 2 as a result of the signing of Gas Sales Agreement with Petronas and Petrovietnam early last year. Phase 2 will increase the production to over 34,000 bpd. A ninth development well is being drilled to ensure that the production level can be sustained for an extended period. After completion of the ninth development well on the Kekwa oil field, the drilling unit will be mobilised to the nearby East Bunga Raya exploration well site, in order to test a large prospect with shallow gas bearing sand channels and deeper oil targets. The Phase 2 development project remains on schedule with first production of 250 million cu ft of gas and 40,000 bpd planned for the end of the 3rd quarter in 2003. The PM-3 production sharing contract was signed with the Malaysian Government on February 16 1989 by Lundin Oil's predecessor, International Petroleum Corp. The block was converted to a commercial arrangement area in June 1992 in order to resolve border dispute between Malaysia and Vietnam. Further negotiations have resulted in the signing of the Gas Sales Agreement and Utilisation Agreement last year, which paved the way for full development of the hydrocarbon resources. The PM-3 CAA lies on the northern flank of the Malay Basin where over 4.3 billion barrels of oil and 40 billion cu ft of gas have been discovered to date. An oil production system was installed in 1997 with first oil production commencing at over 14,000 bpd in August of that year. The rates of production have been sustained by drilling additional wells to supplement the original four producing wells drilled between 1998 and 1999. Due to the current high profitability of this system, work is underway to extend the Phase 1 production system until the first gas production under Phase 2 in 2003. emedia.com.my