Lundin Brothers Trade Acreage

Members of the Lundin family are dealing with one another in a region where numerous finds are being made.

Last month Canada’s Africa Oil Corp pulled out of Puntland without paying its local staff (AEI 596) but the group is far from being broke: it has just debuted on six blocks in Ethiopia and Kenya. Last week Lundin Petroleum sold Africa Oil 85% of blocks 2, 6, 7 and 8 and 50% of the Adigala block in Ethiopia as well as 100% of blocks 10A and 30% of block 9 in Kenya.

The operation didn’t cost the Canadian firm a cent. It was the seller, Lundin Petroleum, which lent it the EUR 20 million needed for the transaction. Africa Oil will pay Lundin back in shares.

The two companies have close ties. Indeed, the president of Africa Oil until 2007 was Lukas Lundin, brother of Ian Lundin, chief executive of Lundin Petroleum. Lukas also sits on the board of Lundin Petroleum.

In addition, Keith Hill, one of the vice presidents of Africa Oil, was previously a director of Lundin for its operations in Malaysia and Sudan.

Africa Oil has decided to step up operations in the Rift region just as Tullow and Heritage are making discovery after discovery on the Ugandan side of Lake Albert. Africa Oil believes the geology of its new acquisitions is similar to that of Uganda’s Graben.

In addition to its stakes in Kenya and Ethiopia, Lundin sold Africa Oil an option that it held on block 35 and M10-A in Somaliland, a breakaway province of Somalia. Both blocks are operated by Ophir that is owned by South African magnate Tokyo Sexwale. M-10A was explored in the past by Pecten, an affiliate of RoyalDutch/Shell.

© Copyright Indigo Publications..

Home | Contact us | Links | Archives | Search