Rosneft could finalize stake purchase in Lagansky block in H1
MOSCOW. Feb 5 (Interfax) - Russian oil major Rosneft may wrap up the purchase of a 51% stake in LLC PetroResurs, which holds the license to the Lagansky block in the Caspian sea, in the first half of this year, a report issued by Lundin Petroleum says.
Lundin Petroleum and Gunvor are the owners of the joint venture.
In October 2013, Lundin Petroleum announced a heads of agreement with Rosneft whereby Rosneft will acquire a 51 percent shareholding in LLC PetroResurs which owns a 100 percent interest in the Lagansky block. Rosneft's consideration in return for the 51 percent equity stake relates to historical spending on the Block and will be paid to Lundin Petroleum and Gunvor through a deferred payment mechanism. Following the completion of this transaction, Lundin Petroleum will have a 34.3 percent effective interest in the Lagansky Block. It is expected that the Rosneft acquisition will be completed in the first half of 2014," Lundin Petroleum said.
This will leave Gunvor will 14.7% in the JV instead of 30%, and Lundin's stake will drop from 70% to 34.3%.
PetroResurs holds a license to explore for hydrocarbons at the Lagansky block in the Caspian Sea until August 2014.
Lundin said earlier that it had long been negotiating with Rosneft to sell a stake in the venture due to Russian legal restrictions under which companies without state shareholders cannot independently operate offshore. Gunvor had also said the partners were willing to sell Rosneft up to a 51% interest in the Lagansky project.
Negotiations to sell a stake in the project were also held with Gazprom . The gas giant even signed a call option with Lundin to acquire 50% plus one share in PetroResurs, but did not exercise it.
Lundin obtained a commercial flow of oil at the block's Morskaya structure, after which contingent reserves were estimated at 233 million barrels of oil equivalent. Two dry wells were drilled at the Lagansky block in 2008-2009, and at the end of 2009 Lundin wrote off more than half the book value of the Lagansky block.
Lundin now says that the Lagansky block has estimated gross contingent resources of 157 million barrels of oil equivalent.