Lundin Petroleum has interests in 4 production and one exploration licence in Russia. Lundin has recently executed an option agreement with GazProm for a 50 % interest in the highly prospective Lagansky block. Drilling of the first exploration well is scheduled for Q2 2008.
IntroductionIn August 2006 Lundin Petroleum acquired Valkyries Petroleum Corp. in an all share transaction. The four producing fields contribute some 5,000 bopd net to Lundin Petroleum’s total production.
Sotchemyu-Talyu Field
Lundin Petroleum has a 50% interest in CJSC Pechoraneftegas (“PNG”), operating in the Komi Republic. PNG is operated as a joint-venture with Arawak Energy Corporation, which owns the remaining 50% interest in PNG. The primary assets of PNG include the Sotchemyu-Talyu field.
The PNG assets are located in the Timan-Pechora basin in Komi Republic of Russia approximately 1,300 kilometres northeast of Moscow. The Timan-Pechora basin is an extensively developed petroleum producing region that straddles the Arctic Circle and is estimated by the U. S. Geological Survey to contain 20 BBOE of ultimate recoverable reserves (66% oil). The Sotchemyu Field Complex, North Irael Field and adjacent Kadzherom licence lie in the southern Timan-Pechora basin adjacent to infrastructure, including a direct tie to the Transneft pipeline. The Sotchemyu Field Complex began production in 1990 and produces primarily from Devonian reef intervals supported by aquifer influx.
12 development wells were successfully completed as producers during 2006-2007. The field is currently producing from 55 active producers.
North Irael Field
Lundin Petroleum has a 50% interest in LLC Recher-Komi, which holds the licence for the North Irael field in the Komi Republic. The North Irael Field is located on trend and approximately 10 kilometres from the Sotchemyu-Talyu fields and is operated by PNG. The production licence for the block, which comprises 76 square kilometers, was awarded in 2000 and was acquired by the current partnership in 2006.
The North Irael Field produces from the same Devonian reef horizon that is productive at Sotchemyu-Talyu. There are currently 8 active producers. In 2006 an appraisal well successfully tested a north eastern extension to the field. Work is continuing to further delineate the field.
Kadzherom Exploration
The East-Kadzherom field has an exploration licence. There is only one exploration well drilled on the structure, which is small and has estimated producible volumes of 124,000 bbls. PNG has applied for a licence for production.
Kaspiskoye Field
Lundin Petroleum holds a 51% interest in CJSC Kalmeastern (“Kalmeastern”), whose principal asset is a 100% interest in the Kaspiskoye Field. Kaspiskoye is located on the south-western margin of the prolific Pre-Caspian Basin on the flanks of the Caspian Sea in the semi-autonomous Republic of Kalmykia. It was discovered in 1960 and is one of a number of producing fields in southern Kalmykia.
Oil has been proven in five horizons in the Kaspsikoye field, i.e. the Aptian plus the Middle Jurassic Bayos I, Bayos IA, Bayos II and Bayos III intervals. These reservoirs were laid down as part of a large-scale fluvio-deltaic to marine depositional system that extended from the Southern Urals to the Caucasus. The reservoirs are relatively thin (2 to 25 metres), heterogeneous sandstones containing varying amounts of silty and argillaceous material. Production started in 1987 and the field is currently producing from 13 active producers, mainly from the Bayos II interval.
Ashirovskoye Field
Lundin Petroleum holds a 50% interest in the Closed Joint Stock Company Oilgaztet (“OGT”). OGT holds the exploration and production licence for the Ashirovskoye field located in the heart of the Orenburg producing region. This region contains the super-giant Orenburg gas field, and is adjacent to the Karachaganak gas condensate field. The Ashirovskoye field was discovered in 1949 but had never been put on sustained production. There are 5 oil bearing formations within the field that range from Devonian to Permo-Triassic in age. A 3D seismic survey was acquired on the field in 2004.
Since late 2005 four wells have been drilled and completed on the deeper Tourninsky and Afoninsky reservoirs. Three wells have been drilled to the shallow Artinsky reservoir of which one well is currently producing. Further development of the field is being assessed.
In addition, the exploration potential on the block is currently being assessed.
Lagansky Block
Lundin Petroleum currently holds a 70% interest in LLC PetroResurs, whose principal asset is a 100% interest in the Lagansky Block exploration licence. The Lagansky Block is located offshore in the Russian sector of the Caspian Sea and is directly adjacent to the onshore Kaspiskoye Field.
The Lagansky Block is 2,000 square kilometres (494,000 acres) in size and is located in the Central Caspian Basin, which contains some of the largest oil and gas accumulations in the world. The block is located on a structural trend that includes the V. Filanovsky , Rakushechnoye and Yuri Korchigan Fields currently being appraised and developed by the Russian major Lukoil.
The Lagansky Block exploration licence was granted in August of 2004. Lundin Petroleum intends to commence a multi well exploration programme on the Lagansky block. Three drillable prospects have been identified, the Morskaya prospect, the Laganskaya prospect and the Petrovskaya prospect with net unrisked resources of over 600 MMboe. It is planned to commence drilling in Q2 2008.
Lundin Petroleum has completed two option arrangements. One option to buy the 30% remaining interest in LLC PetroResurs, and another option to sell 50% to Gazprom. If both options are exercised it will result in Gazprom having 50% plus one share and Lundin Petroleum having 50% minus one share.