OVERVIEW | Chairman’s Statement
Well positioned for the next phase of growth A historic milestone was reached in November 2015 with the commencement of production from the Edvard Grieg field. Gross plateau production is expected to be 100,000 boepd during the second half of 2016. It is by far the largest and most complex project ever undertaken by Lundin Petroleum as an operator and it was delivered on time, on budget, without any adverse impact on the environment and with an excellent safety performance. I am very proud of the team at Lundin Norway for this achievement, which has secured the future for Lundin Petroleum as we move into the next phase of growth, which will culminate with the commencement of production from the Johan Svedrup field. The PDO for Phase 1 of the giant development received final approval in August 2015. Phase 1 is scheduled to come onstream in late 2019 and reach a gross production level in excess of 380,000 bopd. When the full field reaches gross plateau production at between 550,000 and 650,000 bopd, Johan Sverdrup will then represent approximately 40 percent of Norwegian oil production and will be the largest producing field in Norway.
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As demand for oil remains strong and is likely to continue to grow until at least 2030, there is a significant likelihood that the oil price will spike to record levels once again
The operated Bertam field also came on production during the year with first oil achieved in April 2015. This was our first development project in Malaysia and it was completed safely, on schedule and budget within 18 months from PDO approval, which is a remarkable achievement. Lundin Petroleum continues to invest in exploration despite the difficult market conditions, with a strong focus on the southern Barents Sea where Lundin Petroleum has already had significant success with the Alta and Gohta discoveries. In 2016, the Alta discovery will be further appraised, the Neiden well will be reentered and tested and the Filicudi prospect, located just south of Statoil’s Johan Castberg discovery, will be drilled.
Operating at lowest cost in the sector
Ian H. Lundin Chairman of the Board
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Lundin Petroleum Annual Report 2015
Lundin Petroleum is established as a reputable operator in all disciplines from grass root exploration through development and production, with a cost of operations of less than USD 10 per barrel going forward, which is among the lowest in the sector. One reason for the low cost of operations is the fact that Lundin Petroleum has concentrated historically on finding conventional resources with large potential. Our average finding cost in Norway is exceptionally low at USD 0.7 per barrel after tax.