RusEnergy

02-25-2009 - Upstream OnLine - Swedish explorer Lundin Petroleum has been granted a five-year extension on the Lagansky exploration licence, in the Russian sector of the Caspian Sea. The extension, granted by Russian subsoil licensing gency Rosnedra, runs until August 2014. The Lagansky licence holds last year's Morskaya discovery, which has estimated gross recoverable resources of between 110 million and 450 million barrels of oil. Lundin said the extension now allows it to delay drilling of the Morskaya-2 exploration/appraisal well until next year. The well will appraise the western end of the Morskaya discovery. Instead, the company will drill the Petrovskaya-1 exploration well later this year. The Petrovskaya prospect is a four way dip closure which lies on trend and updip of Morskaya and is estimated to contain unrisked potential resources of 300 million barrels. Lundin boss Ashley Heppenstall said: "The extension to the exploration period of the Lagansky Block licence provides us with the requisite time to fully explore this exciting area which already contains the Morskaya discovery.' An option agreement icovering Lagansky was signed in 2007 with Gazprom, which gave the Russian gas giant an option exercisable for a 50% plus one share interest in the block. Lundin also signed an option agreement with its minority partner to buy its 30% stake. The net effect is that, upon completion, Gazprom will own a 50% plus one share and Lundin 50% less one share interest in Lagansky.