Oil and Gas

UPDATE 1-Lundin Energy doubles down on Arctic oil with Idemitsu deal

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OSLO, Oct 5 (Reuters) - Sweden’s Lundin Energy will buy stakes in several oil discoveries in the Barents Sea from Japan’s Idemitsu, adding 70 million barrels of oil equivalent in reserves in a $125 million deal, Lundin said on Monday.

The company simultaneously announced plans to drill three exploration wells in the Barents Sea during the fourth quarter of 2020, with the hope of discovering more than 800 million barrels of oil equivalent if the campaign is successful.

While some banks and asset managers have been backing away from Arctic oil exploration amid criticism from environmental campaigners, Norway still hopes to encourage more drilling in the vast, far-flung region.

Lundin, one of the most active oil firms in the Norwegian Arctic in recent years, maintained it would continue to make bolt-on acquisitions when strong opportunities emerge.

The Idemitsu transaction includes a 10% stake in the Wisting oil discovery and a 15% stake in the Alta find, increasing Lundin’s ownership of the latter to 55%, as well as stakes in several exploration prospects, Lundin said.

The deal, which is subject to Norwegian regulatory approvals as well as approval by Idemitsu’s board, also increases Lundin’s stake in the Polmak exploration well to 47.5% from 40%.

“With the high impact Polmak well due to spud shortly, I am excited at the opportunity and position we have built in the Barents and look forward to reporting on our progress in the months ahead,” Lundin Chief Executive Alex Schneiter said. (Reporting by Terje Solsvik; editing by Jason Neely and Gwladys Fouche)