Lundin to retain 34.3% of Lagansky block after sale of 51% to Rosneft
MOSCOW. Oct 3 (Interfax) - Sweden's Lundin Petroleum, which owns 70% of LLC Petroresurs, its joint venture with Gunvor that holds the rights to the Lagansky offshore block in the Caspian, will have an indirect 34.3% interest in the venture after a controlling stake in the project is sold to Rosneft , Lundin said.
Lundin is therefore selling the Russian state oil major 35.7% of Petroresurs.
Rosneft is buying 51% in the project. Oil trader Gunvor, which holds 30% of Petroresurs, will therefore sell a 15.3% interest in the project, leaving it with 14.7%.
Rosneft president Igor Sechin told reporters on Wednesday that the company had reached an agreement to buy 51% of Petroresurs, which holds a license to explore for hydrocarbons at the Lagansky block in the Caspian Sea until August 2014.
Lundin said it has 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.
