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

To: Aggie who wrote (848)	11/22/1998 9:54:00 PM
From: Oil Tycoon	Read Replies (1) \| Respond to of 2742

To: Aggie who wrote (848)	11/26/1998 10:11:00 AM
From: Tomas	Respond to of 2742

Is There Any Hope For Falklands Drilling As Borgny Dolphin Is Moved Off? Falkland Islands News Network From: Andrea Kennedy for Calling The Falklands Date: 26 Nov 1998 Borgny Dolphin is moving on. Is this the end of the drilling? A Report for Calling the Falklands by Andrea Kennedy (AK) 24/11/98 Less than a year the drilling began, oilmen and the oil rig are moving out. A total of six wells were drilled producing oil shows and source rock but no oil in commercial quantities. The next stage is for companies to go away and look at their data to see if the drilling will begin again. One company, SODRA, still has a commitment to spud one more well in the North Falklands Basin. But, what of Desire Petroleum which was formed specifically for drilling in the Falklands? I phoned Chairman, Colin Phipps (CP) earlier today and asked him, what of the future of the company now that the rig is moving out? CP It leaves Desire, of course, somewhat disappointed that further wells are not going to be drilled. We would like to have seen some more drilling but I think everybody appreciates that even though the wells drilled to date have been encouraging, they haven't found an economic accumulation and with the current level of oil prices which really are at historic lows, in real terms that most of the companies have pulled in their horns with regards exploration. As far as Desire is concerned, we obviously have our licences and we intend to keep them and are hopeful that there will be drilling in the future. If there isn't going to be any drilling in the Falklands for, let us say, a year or two, then our board will certainly consider whether or not we go off and drill elsewhere or what other options are open to us. AK So, Desire might be looking to expand into different parts of the world from now on? CP Yes. We certainly will. I'm not saying for certain that we will do that. I mean, there are a number of options open to the company. I think the thing we don't want to do is to sit and do nothing. AK Now, this series of drilling has come to an end. The oil share prices have been on a bit of a roller coaster. How has the whole process been compared with the work that you did in the North Sea before? CP It's certainly been an exciting time to put it mildly. As far as Desire itself is concerned, we consider the results to date as being encouraging. We certainly think traditional drilling is justified and over the coming years we hope to see that drilling take place. AK Can you see other big companies like Lasmo, Amerada Hess, and Shell coming back to the Falklands? CP I think so. I think it depends on the climate at the time. I think if oil prices had remained at $18.00 to $20.00 it's quite probable the drilling programme would have continued beyond the six wells that we have seen. Not all of the companies will want to come back and there may well be new companies that wish to come in. But, if the international oil climate improves, as always happens, you will see more oil exploration taking place and I think attention will be focused on the Falklands again. __ AK But, is this optimism justified? Chris Hobson (CH) from Upstream Oil Newspaper, has been following exploratory drilling in the Falklands since it began. CH I think at this stage when we have had six wells drilled and we have obviously not had any major finds that the prospects for the Falklands are not too bright. I think you have to say that most of the major players have been down there, have looked, have not found anything and it's much more down now, I think, to the smaller players like Lundin Oil, or Sodra, as they are known down in the Falklands and Desire Petroleum. I think many of the big boys now perhaps are shying away from the area. Certainly I heard that Lasmo and Shell are not certainly so interested as they were in the past and so I think you've got to look at the area and perhaps take a long term view of it and we might be talking a year until they've all assessed the data now and maybe formed another consortium for any more drilling but I don't think it's the end of the story yet. AK Now, Sodra is the only company which still has a commitment to drill one more well in the Falklands within the next five years. How do you see that working, though because it must be very expensive to get a rig down again to the Falklands? CH Getting a rig back to the North Falklands Basin would be an expensive exercise. The way I would imagine it happening may be in a years' time if the data looks good and there could be a rig available nearby in South America working off Brazil or Argentina or somewhere like that. But maybe you could see a rig coming back to the Falklands at that time and I think that is the most likely scenario. AK You've been looking at the oil industry for many years now and you've also been following from close quarters the Falklands. This venture down in the South Atlantic, has it been different from exploration in high risk areas in other parts of the world? CH It certainly has been done differently. The way in which oil companies have co-operated is very impressive and the Falklands is very much a high risk area and most oil companies realise that was always going to be the case and the only way they could actually work was to actually co-operate and that's why FOSA was formed and it has been am impressive performance in oil industry co-operation. I think that one of the central points to come out of this is that a lot of people now have to sit back and have a little bit of a think. They have all shared this data and obviously the Falklands story is not over yet and we could yet see something coming out of this information which the oil companies have gathered. sartma.com ________________________ My comment: I don't think only Sodra has a commitment to drill one more well, also Lasmo/Desire have a commitment to drill. They have 2 Tranches, C & D, and so far they have only drilled one well in Tranche C, but no well in Tranche D.