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Lundin Energy announces its 2021 budget, accelerated Decarbonisation Strategy and Capital Markets Day information

Lundin Energy AB
·9-min read

Lundin Energy AB (Lundin Energy and the Company) is pleased to announce its 2021 programme, with a capital budget of USD 1.2 billion and production guidance of between 170 to 190 thousand barrels of oil equivalent per day (Mboepd). The long-term production guidance is increased to over 200 Mboepd by 2023. The Company will achieve carbon neutrality for operational emissions from 2025, which is accelerated from the original target of 2030.

2021 guidance

2020 results


170 to 190 Mboepd

164.5 Mboepd

Operating cost

USD 3 per boe

USD 2.69 per boe

Development expenditure

MUSD 850

MUSD 640

Exploration and Appraisal expenditure

MUSD 260

MUSD 153

Renewables/Re-forestation Investments



Abandonment expenditure



Long-term guidance

Updated guidance

Previous guidance


Over 200 Mboepd by 2023

170 to 180 Mboepd

Operating cost

USD 3 to 4 per boe

USD 3.2 to 4.2 per boe from 2021 onwards

Carbon neutral target



Production Guidance

The average production in 2020 was 165 Mboepd, which was at the top end of the original guidance range of between 145 and 165 Mboepd. Production for the fourth quarter of 2020 was 185 Mboepd, which was above guidance due to increased facilities capacity and high uptime performance at Edvard Grieg and Johan Sverdrup.

Lundin Energy’s production guidance for 2021 is between 170 and 190 Mboepd. The range reflects that the current Johan Sverdrup Phase 1 facilities capacity of 500 thousand barrels of oil per day (Mbopd) gross is expected to increase up to 535 Mbopd from mid-2021 and that there will be additional facilities capacity available for the Edvard Grieg Area, as a result of the start of natural production decline at Ivar Aasen. The Edvard Grieg tie-back developments, Solveig Phase 1 and the Rolvsnes Extended Well Test (EWT), are expected to commence production in the third quarter 2021 and will contribute to maintaining plateau production through the facilities. The production contribution is split approximately 60 percent from the Johan Sverdrup field, 35 percent from the Greater Edvard Grieg Area and the remainder from the other assets.

The Company’s production is expected to rise to over 200 Mboepd by 2023, reflecting the increased Johan Sverdrup full field plateau level of 720 Mbopd, once Phase 2 comes on stream in the fourth quarter of 2022, and the extended Greater Edvard Grieg Area production plateau period. The Company’s long-term target is to sustain production levels of over 200 Mboepd with upsides from existing fields and potential new development projects.

Accelerated Decarbonisation Strategy
Lundin Energy is accelerating its Decarbonisation Strategy to target carbon neutrality for operational emissions from 2025, from the original target of 2030. This change is underpinned by good progress on the electrification of the Company’s main assets, investments in renewable energy to replace electricity usage and now a commitment to invest in proprietary natural carbon capture projects to offset any residual, hard to abate emissions. Electrification of the Company’s main assets will result in over 95 percent of oil and gas production being powered by electricity from shore by 2023 and committed renewables projects will generate electricity accounting for 60 percent of forecast peak electricity usage, with a plan for further investments to achieve 100 percent in 2023. To offset any residual emissions, the Company has entered into a partnership with Land Life Company BV to plant approximately 8 million trees, investing MUSD 35 between 2021 and 2025, capturing approximately 2.6 million tonnes of CO2.

The 2021 budget for renewables and reforestation investments is MUSD 70. This includes the Leikanger hydropower project in Norway, which is scheduled for final completion in the first half of 2021, the Metsälamminkangas (MLK) wind farm project in Finland that is due for completion at the start of 2022 and the first phase of the reforestation projects.

Development Budget

The 2021 development expenditure is budgeted at MUSD 850 and reflects the actions taken to defer activity from 2020 to 2021, due to the low oil prices in 2020.

Approximately 35 percent of the 2021 budgeted development expenditure relates to the non-operated Johan Sverdrup field (WI 20%). Development drilling for Phase 1 will continue throughout 2021, while the Phase 2 project will see the installations of the second processing platform jacket, a process module on the existing riser platform and subsea production facilities.

Approximately 55 percent of the budgeted development expenditure relates to activity in the Greater Edvard Grieg Area. The Edvard Grieg field (WI 65%) programme includes the drilling of three infill production wells and continuation of the electrification project, which will see the field powered from shore by late 2022. The Solveig Phase 1 (WI 65%) and Rolvsnes EWT (WI 80%) projects, will see the completion of the facilities installation and the start of development drilling in the second quarter, which will continue through to 2022.

Budgeted expenditure at the non-operated Alvheim area involves the drilling of two infill wells and development spend for the Kobra East/Gekko and Frosk tie-back projects, which are scheduled for sanction/PDO in mid-2021.

Exploration and Appraisal Budget
The exploration and appraisal budget for 2021 is MUSD 260 and involves the drilling of eight wells, seven of which remain to be drilled, with the programme targeting over 300 MMboe of net unrisked resources.

The Company also has nine potential new projects which are being prioritised for development within the temporary tax incentives that require a PDO to be submitted before the end of 2022. These potential projects are Solveig Phase 2 and Segment D (WI 65%), Lille Prinsen (WI 40%), Rolvsnes Full Field (WI 80%), Iving (WI 41%), Alta (WI 55%), Wisting (WI 10%), and the Alvheim Area projects of Kobra East/Gekko (WI 15%), and Frosk (WI 15%), which have net resources totalling approximately 200 MMboe. Approximately 50 percent of the exploration and appraisal budget is for drilling activities and engineering studies to de-risk these potential projects with the aim of maturing them to PDO within the time-line of the tax incentives.

Remaining 2021 exploration and appraisal well programme







Lundin Energy

Utsira High




Lundin Energy

Utsira High


Solveig Segment D


Lundin Energy

Utsira High


Lille Prinsen appraisal


Lundin Energy

Sele High





East of Alvheim Area


Iving appraisal



Alvheim Area





Southern Barents Sea



1 Following completion of announced transactions

Abandonment Expenditure
The 2021 abandonment expenditure budget is MUSD 20 to finalise the Brynhild field decommissioning with the removal of the subsea facilities.

2021 Capital Markets Day information

Lundin Energy will be hosting its 2021 Capital Markets Day on 28 January 2021 at 14.00 CET (08.00 EST) via a webcast and conference call facility. The Capital Markets Day will include presentations by the Company’s management team on its fourth quarter 2020 financial results, the business strategy, the 2021 budgeted development campaign, its exploration and appraisal programme and decarbonisation strategy. Please follow the event live at or dial in using the following telephone numbers with the pin code shown below:


+44 2071 928338


+46 8 566 184 67


+47 21 56 30 15


+1 646 741 3167

Access Pin :


Webcast link:

Lundin Energy has grown from an oil and gas exploration company into an experienced Nordic energy developer and operator. We continue to explore new ideas, new concepts and new solutions to maintain our position as an industry leader in production efficiency, sustainability and decarbonisation. (NASDAQ Stockholm: LUNE). For more information, please visit us at or download our App

For further information, please contact:

Edward Westropp
VP Investor Relations
Tel: +41 22 595 10 14

Robert Eriksson
Head of Media Communications
Tel: +46 701 11 26 15

This is information that Lundin Energy AB is required to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact persons set out above, at 07.30 CET on 28 January 2021.

Forward-looking statements
Certain statements made and information contained herein constitute “forward-looking information” (within the meaning of applicable securities legislation). Such statements and information (together, “forward-looking statements”) relate to future events, including Lundin Energy’s future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations and assumptions will prove to be correct and such forward-looking statements should not be relied upon. These statements speak only as on the date of the information and Lundin Energy does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, operational risks (including exploration and development risks), productions costs, availability of drilling equipment, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. These risks and uncertainties are described in more detail under the heading “Risk management” and elsewhere in Lundin Energy’s Annual Report. Readers are cautioned that the foregoing list of risk factors should not be construed as exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are expressly qualified by this cautionary statement.