Lundin issues major Luno field contracts

Offshore staff

Lundin Norway has submitted a plan for development and operation (PDO) for the Luno field in the Norwegian North Sea.

The company continues negotiations with Det norske Oljeselskap, operator of license PL001B, in relation to a coordinated development solution involving Det norske’s Draupne field 10 km (6.2 mi) to the northwest, as requested last year by the Norwegian authorities, and Lundin expects an agreement shortly.

Luno is an oil field in license PL338 with reserves of 186 MMboe, and the development would incorporate the Tellus discovery. First production is expected in late 2015 building to a peak of 90,000 b/d of oil. Lundin estimates the capital cost of the program, including platform, pipelines, and production wells, at $4 billion.

The platform will have capacity to accommodate more than 120,000 b/d of oil, assuming that Draupne’s production is combined with that from Luno.

Lundin’s plan calls for 15 wells drilled from a jackup, a processing platform on a jacket structure, and export pipelines tied back to existing infrastructure. Oil will be processed and transported through a new pipeline to the Grane area and then via the Grane oil pipeline to the Sture terminal in western Norway for sale.

Facilities on the new platform will be prepared to receive power from shore when capacity and technical solutions are available, to assist the government’s goal of long-term electrification of the area.

Draupne is in PL001B. The proposed development solution for Draupne is a platform which will transport part-processed oil and gas to Luno’s facilities for stabilization and subsequent export.

Lundin has started placing contracts for Luno. It has awarded Kvaerner a letter of intent following an international tendering process, covering engineering, procurement, and construction of the jacket. Rowan Co. has a contract to provide a rig to drill the development wells. Contracts for the topside and marine installations will be issued shortly.

Ashley Heppenstall, president and CEO of Lundin Petroleum, said: “Production from the Luno field will be the major contributor in doubling our production to 70,000 boe/d by late 2015. Our production will increase further with the subsequent development of the Johan Sverdrup discovery located in the southern Utsira High.”

Lundin operates Luno with a 50% interest, in partnership with Wintershall (30%) and RWE Dea (20%).

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