Annual Report 2005 (6 MB) - Lundin Petroleum

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Group
2005
Non-production cost pools 1 January Additions Write-off s
Currency
translation
diff erence 31 December
Indonesia 14,657 17,469 -855 11,543 42,814
Tunisia 3,760 74,493 – 1,045 79,298
Albania 4,085 24,476 – 1,708 30,269
Nigeria – 158,174 -158,174 – –
Iran – 6,040 -6,040 – –
Sudan 20,802 7,798 – 157 28,757
Other 6,437 15,444 -12,197 345 10,029
49,741 303,894 -177,266 14,798 191,167
2004
Non-production cost pools
Indonesia 14,199 13,972 -8,499 -5,015 14,657
Tunisia – 3,805 – -45 3,760
Albania – 4,132 – -47 4,085
Iran 70,965 51,717 -123,820 1,138 –
Sudan 17,261 5,576 – -2,035 20,802
Other 1,265 9,232 -3,885 -175 6,437
103,690 88,434 -136,204 -6,179 49,741
Acquired on acquisition includes the values assigned to the oil and gas properties acquired through the purchase of the shares in Lundin
Britain Ltd (formerly DNO Britain Ltd) and Lundin Ireland Ltd (formerly Island Petroleum Developments Ltd) and certain Norwegian assets
from DNO ASA during 2004. Acquired on consolidation relate to adjustments made in 2005 to the values assigned to the oil and gas
assets acquired through this acquisition.
Capitalised interest
The capitalised interest costs included within the costs of oil and gas properties amounts to MSEK 13.7 (MSEK -) and relates to oil and gas
assets in Norway.
Exploration expenditure commitments
The Group participates in joint ventures with third parties in oil and gas exploration activities. The Group is contractually committed
under various concession agreements to complete certain exploration programmes. The Directors estimate the present commitments to
be no more than MSEK 216.9 of which third parties who are joint venture partners have contractually agreed to contribute approximately
MSEK 79.2.
Risk and uncertainties
The Group faces a number of risks and uncertainties in the areas of operation which may have an adverse impact on its ability to
successfully pursue its exploration, appraisal and development plans as well as on its production of oil and gas.
■ Nature of oil and gas exploration and production. Oil and gas exploration, development and production involve high operational and
fi nancial risks, which even a combination of experience, knowledge and careful evaluation may not be able to fully eliminate or which
are beyond the Company’s control. In addition, there is no assurance that commercial quantities of oil and gas will be recovered.
■ Property and/or border disputes. The exact location and jurisdictions within which the Group’s concessions exist could become the
subject of dispute.
■ Military and political disturbances. Certain of the countries in which the Group is operating have experienced military or political
diffi culties in the recent past.
■ Political uncertainties. Certain aspects of the Group’s operations require the consent or favourable decisions of governmental bodies.
■ Environmental impacts. Exploration, development and production of oil and gas could cause harm to the environment. Under applicable
laws and regulations as well as exploration and production sharing agreements, the Company may be held liable.
■ Liabilities and obligations under exploration and production agreements. The Company and its partners in joint ventures for oil and gas
exploration and production, are joint and several liable for obligations and liabilities under relating agreements. In case joint venture
partners are not able to meet their liabilities and obligations, the agreement may be terminated.