North Sea oil group Lundin Petroleum insists it will not sell off its stake in the Johan Sverdrup field
Analysts had expressed concerns over the Swedish firm’s involvement in the project, after issuing a profits warning earlier this year and facing delays and cost overruns to the £13billion project.
But chairman Ian Lundin said the company was looking to Sverdrup to help grow the company in Europe.
“We have the financial capability and resources to follow through,” he said.
“We don’t want to reduce our growth profile for short-term benefits.”
Lundin sees participation in the deposit, which could hold as much as 2.9billion barrels of oil, as central to its ambition to be Europe’s largest independent owner of oil licenses.
“There is no pressure at all to sell anything,” he said. “We are in the business to develop and produce, we’re not in the business to buy and sell.”
The company is the second largest owner owner of oil licenses in Norway, and second across Europe to Tullow Oil among the top independents
“We would like to be the first,” Ian Lundin said. To leapfrog Tullow “would be a tight race but we want to be at least biting at their tail.”
Discovered in two parts by Lundin in 2010 and Statoil in 2011, Sverdrup renewed optimism in Norway’s oil industry following a decade of dwindling North Sea output.
The find may be Norway’s largest since Statfjord in 1974 and could supply as much as 25 percent of its oil production 10 years from now.
The first phase of Sverdrup’s development is estimated to cost as much as £13billion, with a planned startup in 2019.
Analysts at HSBC Holdings said last week Lundin should sell some, or all, of its stake in the field, which has become the “elephant in the room” and risks becoming more expensive than planned and overshadowing future exploration success at the company.
The firm owns 40 percent in one of three licenses covering Sverdrup and 10 percent of another. Talks with partners Statoil, Det Norske Oljeselskap, Petoro and Maersk on the division of the field will be completed ahead of the development plan being published early next year.
The chairman is the second child of Adolf Lundin, who started to build the family’s energy and mining fortune after working at Royal Dutch Shell Plc as a petroleum engineer. Stockholm-based Lundin Petroleum is 31 percent owned by the family.
The company said in January that operating cash flow will exceed $1 billion this year, while reserves will increase more than threefold on submission of the Sverdrup development plan.
Its 2014 program includes starting output at Norway’s Brynhild field and at Bertam in Malaysia.
The company plans 19 exploration wells in 2014 — when total investment will rise to $2.13 billion from $1.73 billion – – and is also on the lookout for new assets.
“If anything we would be in a more acquisitive mode than a disposal mode,” the chairman said. “We don’t have anything specific today but if the opportunity came up to acquire interests in new fields we would take a serious look at it in our existing geographic areas of Europe and Southeast Asia.”
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