Despite Enjoying Sustained Production Growth, Lundin is Still Focused on Exploration

Lundin Petroleum is one of the leading independent E&P companies operating in the Norwegian Continental Shelf (NCS). At present it has for significant assets, two in production – Edvard Grieg and Alvheim, and two further fields in development, Johan Sverdrup and the Edvard Grieg tiebacks.

"We are expecting significant production figure for the year, but the end result will very much depend on Johan Sverdrup," Kristin Færøvik, managing director, Lundin Norway, explains. "It is very exciting. When the field is in full flow, our production will be almost double where it is today, and then we'll see another significant increase when phase two comes online."

Waiting for the giant
Lundin is the second largest partner in the giant Johan Sverdrup field that is expected to produce first oil later this year. The main offshore installations are complete, and currently, the hook-ups and commissioning are underway which will be followed by completing the tiebacks to the eight drilled wells.

In 2018 Lundin produced 81 Mboepd, that is expected to rise to the mid-90s this year depending on the actual date Johan Sverdrup produces first oil and then climbing to 150 Mboepd in 2020. But Lundin is not resting on its laurels with the success of Johan Sverdrup. The company has seven core exploration areas across the NCS ranging from Mandal High in the south, going around the Norwegian coastline to Southeaster Trend in the far north.

"We have very significant exploration portfolio," Færøvik says. "This year alone, we will participate in about 15 exploration wells. That is a substantial portion of the total program for the NCS, so we are a major player when it comes to exploration, all in line with our organic growth strategy."

Seeking the last drop
That philosophy is all about significantly extending plateau production through infills and tiebacks. That is evidenced by their work on the Edvard Grieg field where Lundin is developing a series of ties backs. The first two, Solveig and Rolvsnes were sanctioned this year and the major contracts awarded, with first oil expected in 2021.

The Solveig oil discovery is 15 km south of the Edvard Grieg field and will be developed via a subsea tieback to the Edvard Grieg platform, involving five development wells with gross peak production of 30 Mboepd. The Solveig project will be implemented together with the Rolvsnes Extended Well Test (EWT) project to take advantage of contracting and implementation synergies.

Solveig phase 1 contains 57 MMboe of gross proved plus probable reserves (37 MMboe net to Lundin). The development scheme involves three horizontal oil production wells and two water injection wells. The potential for further phases of development, which will capture the upside potential in the discovered resources, will be de-risked by production performance from phase 1.

"We are bringing forward new projects for sanction," Færøvik adds. "2019 was the fifth year in a row where we have replaced reserves above what we produced. The exploration program in total is targeting more than 750 million Boe on risked resources, so there's significant potential there.

Looking at the basement
"Another exciting reservoir type on the NCS is the basement potential that we have proven up in Rolvsnes. We will test this further with extended well testing that will start in 2021. We haven't exploited this potential to the full because we're drilling the Goddo exploration later this year and that's hopefully an extension of the basement play that we have proven in Rolvsnes."

Another core area for Lundin us is the Aker BP-operated Alvheim area a bit further north of Edvard Greig. "The field has been producing for more than 10 years already, and we continue to find new opportunities, whether that be exploration or infill targets in the area," Færøvik says. "Our number one priority is organic growth, but we always look at inorganic opportunities on an opportunistic basis. We have recently acquired Equinor's interest in Solveig that gives us balanced ownership across the Edvard Greig and Solveig fields so we can manage the two fields as one."

"We have a more diverse and a more geographically spread portfolio than we've ever had before. We have also had great success in the regular licensing rounds. But we will continue exploring, it is in our DNA so we will always continue to explore."

Source: Forbes
Date: May 28, 2019