RusEnergy

MOSCOW, July 9 (RIA Novosti) - A Swedish oil company announced it has made a major oil discovery in Russia's north Caspian Sea, Lundin Petroleum AB said in a news release. The discovery was made during exploratory drilling on the Morskaya-1 well on the Lagansky block close to a recent discovery made by Russia's largest independent crude producer, LUKoil. "This is a world class oil discovery which has confirmed the excellent prospectivity of the Lagansky block," said Ashley Heppenstall, President and CEO of Lundin Petroleum. The Swedish company said further appraisals would be required. The test well is to be moved to Laganskaya-1, where drilling is expected to commence at the end of September. Lundin Petroleum plans to drill a further two wells in 2009. "It is clearly positive that the discovery is predominantly oil but based upon the data acquired it appears that the size of the discovery will be below pre-drill estimates. Further appraisal drilling will be needed to assess the full extent of the hydrocarbon reservoirs across such a large structure," the CEO said. The Lagansky block has estimated reserves of more than 800 million barrels of oil equivalent. Lundin Petroleum currently has a 70% interest in the Lagansky block, although Russian state-run energy giant Gazprom has a call option to acquire a 50% plus one share. In addition, Lundin Petroleum has a call option to acquire an additional 30% from minority shareholders. If both options are exercised Lundin Petroleum will retain 50 percent minus one share in the Lagansky block and Gazprom will hold 50% plus one share in the project. Lundin Petroleum is an independent oil and gas exploration and production company with a well balanced portfolio of world-class assets in Europe, Africa, Russia and the Far East. The company has existing proven and probable reserves of 184.2 million barrels of oil equivalent as of January 1.