Ludin Oil Begins Exploration Offshore Malaysia/Vietnam

Lundin Oil AB, through its wholly owned subsidiary Lundin Malaysia Limited together with PETRONAS Carigali and PetroVietnam Exploration & Production, are pleased to announce that a new exploration well has commenced on an extension of the Bunga Raya Field on Block PM3 Commercial Arrangement offshore Malaysia/Vietnam.

The well, known as "East Bunga Raya 1" will be drilled to an approximate total depth of 8,000 feet and will target both deeper oil bearing reservoirs and shallow gas filled sand channels. The Bunga Raya Field was discovered in 1991 with the drilling of Bunga Raya 1 well which flowed 1,120 barrels per day of oil (bopd) and 63 million cubic feet per day of gas. The field constitutes an important part of the existing reserves on Block PM3. This new well could increase the oil and gas reserves in the Bunga Raya Field substantially. Current proven and probable reserves on Block PM3 are in excess of 144 million barrels of oil and 1.5 trillion cubic feet of gas.

In addition to the continued exploration in Block PM3, the Company also has an extensive production enhancement program underway on the producing Bunga Kekwa Field. This enhancement program has already achieved great success, as previously announced, through the reperforation of two producing wells. This work will continue with acid stimulation of three other producing wells and the drilling of two more development wells on the eastern flank of the Bunga Kekwa Field. The end result of this production enhancement program is that sustainable production levels from the Block should increase to over 17,000 bopd by the end of the first quarter of 2001 and will be limited to the capacity of the production facilities. Current production levels are approximately 15,000 bopd.

Lundin Oil AB has a 41.44 percent working interest in Block PM3 (held through its subsidiaries, Lundin Malaysia Limited with 26.44 percent and Lundin Malaysia AB with 15.00 percent) The Operator of the Block is Lundin Malaysia Limited The remaining working interest is held by Petronas Carigali Sdn Bhd with 46.06 percent and PetroVietnam Exploration and Production with 12.5 percent.