Lundin, Petronas and Petrovietnam Acquire the Cai Nouc Development Area

Lundin Oil AB, through its wholly owned subsidiary Lundin Vietnam Limited, Petronas Carigali Overseas Sdn Bhd and Petrovietnam E&P, have concluded an agreement with TotalFinaElf subsidiary Fina Exploration Minh Hai B.V. and PTTEP International Limited to purchase their combined interest in the Cai Nouc Development Area offshore Vietnam.

Under the terms of the agreement, Lundin will act as operator for the group with 33.154034% interest with PCOSB and PVEP holding the remaining 36.845966% and 30% respectively, subject to government approval.

The Area contains a unitised portion of the Cai Nuoc/Kekwa field, which is currently producing approximately 18,000 barrels of oil per day. The reserves within the Area will be developed as part of Phase 2 of the PM3CAA development project scheduled to come on stream late in the 3rd quarter of 2003 at a total rate of 250 million cubic feet of gas and 40,000 barrels of oil per day. The inclusion of the Area in the overall project means that production rates will probably increase once a market has been secured for the gas reserves within the Area.

Lundin Oil President Ian Lundin commented: "This asset will add significant proven oil and gas reserves to our existing Southeast Asia portfolio. The fact that the same partners have an interest on both sides of the border between Malaysia and Vietnam, means that the Kekwa/Cai Nuoc Field will be developed in the most cost efficient and effective manner."