Lasmo gas reserves boosted

LASMO, the debt-laden oil independent, is today expected to disclose a substantial boost in its proven gas reserves in Indonesia, writes Neil Thapar.

This follows an independent analysis of the giant Sanga Sanga gas field in East Kalimantan, in which Lasmo inherited a 37 per cent interest via its pounds 1bn takeover of Ultramar last year.

It is understood that the company's proven reserves from the field have been increased by 34 million barrels of oil equivalent, an 8 per cent jump, to 455 million barrels.

The upgrade is important because it enhances Lasmo's share of gas supplied to Bontang, one of the world's biggest liquified natural gas processing faciliies.

The plant supplies almost half the liquified natural gas requirements of the Pacific Rim, the world's fast-growing liquified natural gas market.

As a result, Lasmo's upgrade is likely to improve its share in Bontang's output in the next few years. The plant currently accounts for dollars 100m annual cash flow to Lasmo, but this is expected to increase by about 15 per cent.

The Sanga Sanga news should be welcome in the market. Lasmo is expected to announce a sharp fall in its interim results this month, and there are fears it may be forced to cut the dividend.