Annual Report 2005 (6 MB) - Lundin Petroleum

NOTES
Venezuela
In November 2002, Lundin Petroleum commenced arbitration proceedings against one of its partners in the Colón Unit in Venezuela in
respect of a dispute over pre-emptive rights under the Colón Unit joint operating agreement. The arbitration hearing was completed in
2004 and as a result Lundin Petroleum’s working interest in the Colón Unit has remained at 12.5%.
In 2005 the Venezuelan government decided to restructure all operating services agreements in the country. Lundin Petroleum and its
partners have signed a Transitional Agreement with Venezuelan national oil company PDVSA Petròleo SA. This agreement is relating to
entering into good faith negotiations for conversion of the Operating Services Agreement into a joint venture company. The fi nal eff ect
of this transition on Lundin Petroleum’s Venezuelan assets and values remains uncertain although Lundin Petroleum and its partners have
been assured by the Venezuelan Ministry of Energy and Petroleum that the new regime will preserve our asset value under the Operating
Services Agreement.
NOTE 10 – OTHER TANGIBLE ASSETS (TSEK)
Other tangible fi xed assets:
Assets under
construction
(real estate)
2005 2004
Office
equipment and
other assets Total
> 66 <
Assets under
construction
(real estate)
Office
equipment and
other assets Total
Group
Cost
1 January 10,905 39,365 50,270 41,614 24,005 65,619
Acquired on acquisition – – – – 1,617 1,617
Disinvestments – – – -41,821 – -41,821
Additions 40,190 16,453 56,643 12,088 19,518 31,606
Write-off – -9 -9 – -2,286 -2,286
Reclassifi cation – 798 798 – – –
Currency translation diff erence 4,912 6,860 11,772 -976 -3,489 -4,465
31 December 56,007 63,467 119,474 10,905 39,365 50,270
Depreciation
1 January – -12,269 -12,269 -754 -9,509 -10,263
Disinvestments – – – 758 – 758
Depreciation charge for the year – -9,781 -9,781 – -5,287 -5,287
Write-off – – – – 1,445 1,445
Currency translation diff erence – -3,288 -3,288 -4 1,082 1,078
31 December – -25,338 -25,338 – -12,269 -12,269
Net book value 56,007 38,129 94,136 10,905 27,096 38,001
Parent Company
Cost
1 January – – – – 158 158
Additions – – – – 131 131
Write-off s – – – – -289 -289
31 December – – – – – –
Depreciation
1 January – – – – -63 -63
Depreciation charge for the year – – – – -33 -33
Write-off s – – – – 96 96
31 December – – – – – –
Net book value – – – – – –
Depreciation charge for the year refl ects depreciation according to plan which is based on cost and an estimated useful life of 10 years
for real estate and 3 to 5 years for offi ce equipment and other assets. Depreciation is included within the general, administration and
depreciation line in the income statement.
Acquired on acquisition includes the values assigned to the offi ce equipment and other fi xed assets acquired through the purchase of the
shares in Lundin Britain Ltd (formerly DNO Britain Ltd) during 2004.