It’s not super clear though how this figure will really affect the offshore part of their business. From their press release, they seem pretty committed to their offshore business.
Here’s a more in-depth look at their plans for next year:
77 percent of the 2015 budgeted development expenditure, corresponding to USD 750 million, relates to ongoing development projects in Norway with the majority of the balance being spent on the Bertam development in Malaysia. By the end of 2015 the Brynhild, Bøyla and Bertam development projects will be completed and will incur no further planned capital expenditure beyond 2015 whilst Edvard Grieg will see the development drilling campaign concluded in 2017.
The capital expenditure on Phase 1 for the Johan Sverdrup development will be confirmed at the time of submitting the plan of development in February 2015 and is thus not included in the current 2015 expenditure budget.
- The development of the Edvard Grieg field (WI 50% and operated by Lundin Petroleum) is progressing according to plan and budget. During 2014 the main activities consisted of the successful installation of the steel jacket, substantially completing the construction of the topsides and the commencement of the development drilling. The 2015 net expenditure is budgeted at USD 490 million which will involve the continuous drilling of the development wells, offloading, transportation and installation of the topsides and the completion of the oil and gas pipelines. Edvard Grieg is scheduled to come onstream in the fourth quarter 2015 and is estimated to produce 50,000 barrels of oil equivalent per day (boepd) net to Lundin Petroleum once the plateau production level has been reached in mid 2016.
- The Brynhild field (WI 90% and operated by Lundin Petroleum) commenced production in late December 2014. The main 2014 activity consisted of drilling and completing the second development well in addition to partially completing the third development well. A new production riser was installed and the Haewene Brim FPSO modification and life extension work was also completed during 2014. The 2015 budgeted net capital expenditure of USD 150 million relates to the completion of the third development well as well as the drilling and completion of the fourth and final development well.
- The non-operated Bøyla field (WI 15%) is scheduled to come onstream during the first quarter 2015 at an estimated production level of 3,000 boepd net to Lundin Petroleum. The main development activity during 2014 consisted of the drilling of the 3 development wells as well as the completion of two of these wells. The installation of the flowline to the Kneler A manifold on the Alvheim field was also successfully completed during 2014. The 2015 budgeted net capital expenditure amount to USD 10 million and relates to the completion of the third and final development well.
- Net budgeted expenditure for 2015 on the non-operated Alvheim and Volund fields (WI 15% and WI 35% respectively) is USD 75 million which involves the drilling of two infill wells on Alvheim as well as the completion of a third infill well which is currently in the process of being drilled. Both Alvheim and Volund will also incur certain costs in relation to the Viper/Kobra development. Volund will incur further costs in relation to long-lead items for 2 planned infill wells. 5. The Bertam oil field (WI 75%) in Malaysia is scheduled to come onstream during the second quarter 2015 and reach plateau production late in 2015 at a net rate of 11,000 bopd. The main 2014 activities consisted of construction, transportation and installation of the wellhead platform as well as substantially completing the upgrade of the Bertam FPSO. The development drilling also commenced in 2014 with 3 pilot wells being completed and 2 horizontal sections successfully completed. The budgeted net capital expenditure for 2015 is USD 180 million and relates to the drilling and completion of 12 development wells and the installation and
hook-up of the Bertam FPSO.
- Net budgeted expenditure for 2015 on the continental European business units in France and the Netherlands amounts to USD 55 million which involves the drilling of 7 infill wells on the Vert la Gravelle field in the Paris Basin, 3 development wells in the Netherlands as well as various well workovers and facilities related upgrades across these business units.
The pre-tax exploration budget for 2015 is USD 320 million with a major focus on Norway which accounts for approximately 85 percent of the budget. The exploration programme involves the drilling of 11 exploration wells in Norway, Malaysia and offshore the Netherlands targeting total net unrisked prospective resources of 5101 million barrels of oil equivalent (MMboe).
The pre-tax budgeted net exploration expenditure for 2015 is approximately USD 275 million. A total of seven exploration wells will be drilled in Norway during 2015 targeting net unrisked prospective resources of 480 MMboe. The 2015 exploration campaign is targeting prospects in both of Lundin Petroleum’s core exploration areas on the Norwegian Continental Shelf, namely the Utsira high in North Sea and in the Barents Sea. The Utsira High campaign comprises of four wells; on PL674 (WI 35%, Zulu), on PL359 (WI 50%, Luno II North), on PL544 (WI 40%, Fosen) and on PL338C (WI 80%, Gemini). The Barents Sea exploration campaign consists of one operated well on PL708 (WI 40%, Ornen) and one operated well on PL609 (WI 40%, Neiden). One operated well will also be drilled in the More Basin in the North Sea on PL579 (WI 50%, Morkel). [B]Rigs have been secured for all seven wells.[/B]
The budgeted net exploration expenditure for 2015 is USD 35 million involving the drilling of two operated exploration wells on PM307 (WI 75%, Rengas and Mengkuang) as well as a seismic survey on PM328 (WI 50%).
The pre-tax appraisal budget for 2015 is approximately USD 150 million entirely allocated to appraisal wells in Norway. The appraisal programme involves the drilling of 3 appraisal wells with two being drilled on the 2014 Alta discovery on PL609 (WI 40%) in the Barents Sea and the third appraisal well being drilled on the Edvard Grieg field on PL338 (WI 50%) as a follow-up to the successful 2014 appraisal well on Edvard Grieg.[B] Rigs have[/B] [B]been secured for all three appraisal wells.[/B]