Lundin Energy to acquire Barents Sea portfolio from Idemitsu Petroleum

Lundin Energy said that its fully-owned subsidiary – Lundin Energy Norway has signed a deal worth $125 million with Idemitsu Petroleum Norge (IPN) to acquire stakes in a portfolio of licences in the Barents Sea.

The deal includes a working interest of 10% in the Wisting oil discovery and an additional working interest of 15% in the Alta oil discovery.

Overall, the deal adds estimated net contingent resources of around 70 MMboe to the Swedish oil and gas company.

Located across licences PL537 and PL537B, the Wisting oil discovery is estimated to hold 500 million barrels of oil (MMbo). It is slated to become one of the next production hubs in the Barents Sea.

Equinor, which is the operator of the Wisting oil project in the development phase, is looking to submit a plan for development and operation (PDO) by end 2022.

Lundin Energy increases its operating stake in the Alta oil discovery in licences PL609, PL609B and PL609D from 40% to 55%. The Swedish oil and gas company said that it is assessing the potential to fast track the development of the Alta oil field with the objective to benefit from the temporary tax incentives from the Norwegian government, as announced in June 2020.

In addition to the Wisting oil discovery and the Alta oil discovery, Lundin Energy will increase its working interests in licences PL609C and PL851. As part of this, its working interest in the operated Polmak exploration well will be increased from 40% to 47.5%.

Polmak is the first of three high impact exploration prospects to be drilled by Lundin Energy in the Barents Sea during the fourth quarter of this year.

It will be drilled by the West Bollsta semi-submersible drilling rig, with spudding slated to take place this month.

Lundin Energy to increase footprint in Barents Sea through the deal with Idemitsu Petroleum. Photo courtesy of Lundin Energy AB.

Alex Schneiter – President and CEO of Lundin Energy said: “I am very pleased to announce this strategic acquisition which strengthens Lundin Energy’s position in one of our core exploration areas and provides an interest in a major commercial oil discovery, as well as increasing our working interest in the operated Alta oil discovery.

“As we have always maintained, we will look to supplement our successful organic growth strategy with value-add, bolt-on acquisitions which add high quality, commercial resources and importantly, also complement our low cost and low carbon emissions production portfolio.

“With the high impact Polmak well due to spud shortly, I am excited at the opportunity and position we have built in the Barents and look forward to reporting on our progress in the months ahead.”

The deal is subject to approval of the Idemitsu Kosan’s board of directors and the usual regulatory approvals in Norway.