Lasmo pays pounds 283m for Venezuelan oilfields

Lasmo, the UK's second largest independent oil exploration group, has embarked on its biggest ever expansion strategy and the most ambitious spending spree since its ill-judged pounds 1bn takeover of rival Ultramar six years ago.

The group is paying $453m (pounds 283m) in cash, by far its biggest production investment to date, to take over a large oil concession in north-east Venezuela, after beating off competition from operators in Argentina and China. The 20-year contract will also involve a further $750m of investment paid in the first five years of operations, which will raise Lasmo's forecast production by 25 per cent to 250,000 barrels a day by 2000.

The news gave a further boost to Lasmo's share price, which has already been lifted this year by news of a potentially lucrative gas find in Pakistan. The shares rose 11p to 259p, just short of their 12-month peak of 262.5p.

The plan is to substantially raise production capacity in the Dacion area in Venezuela, which includes three fields developed since the 1940s. The aggressive strategy, to rehabilitate existing fields, is a departure for Lasmo which has been better known for drilling in newly emerging areas like Algeria. The group said seismic tests had shown additional oil to that uncovered by the existing state operator, Corproven. No significant test had been carried out since the 1950s.

The $453m up-front investment would be paid on 1 August and would raise Lasmo's gearing levels from 27 per cent to around 50 per cent. Lasmo denied it was paying too much for the concession. The nearest bidder, from Argentina, had offered $50m less for the contract while the Chinese National Petroleum Corporation made a bid of $329m.

Joe Darby, chief executive said: "We certainly don't think we are over- paying. In face we could have paid more. It's enormous and 70 per cent of the block remains unexplored."

Mr Darby also dismissed suggestions that the investment was an attempt to head off a potential takeover approach from a rival oil group. "We are not focused on whether we're vulnerable as a takeover candidate. This is purely to add value for shareholders. Gone are the days when we were concerned at being taken over."

Mr Darby said further expansion plans were being considered in North Africa and Pakistan. Existing activities being developed focus on Algeria, the deep water fields to the west of the Shetlands, the Apennine mountains in Italy and a new partnership in Kuwait.

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
From Mean Girls to Mamet: Lindsay Lohan
theatre
Sport
Nathaniel Clyne (No 2) drives home his side's second goal past Arsenal’s David Ospina at the Emirates
footballArsenal 1 Southampton 2: Arsène Wenger pays the price for picking reserve side in Capital One Cup
News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
peopleFormer boxer 'watched over' crash victim until ambulance arrived
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
i100
Travel
travelGallery And yes, it is indoors
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Arts and Entertainment
The Tiger Who Came To Tea
booksJudith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed'
News
i100
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Syria air strikes: ‘Peace President’ Obama had to take stronger action against Isis after beheadings

Robert Fisk on Syria air strikes

‘Peace President’ Obama had to take stronger action against Isis after beheadings
Will Lindsay Lohan's West End debut be a turnaround moment for her career?

Lindsay Lohan's West End debut

Will this be a turnaround moment for her career?
'The Crocodile Under the Bed': Judith Kerr's follow-up to 'The Tiger Who Came to Tea'

The follow-up to 'The Tiger Who Came to Tea'

Judith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed' - which has taken 46 years to get into print
BBC Television Centre: A nostalgic wander through the sets, studios and ghosts of programmes past

BBC Television Centre

A nostalgic wander through the sets, studios and ghosts of programmes past
Lonesome George: Custody battle in Galapagos over tortoise remains

My George!

Custody battle in Galapagos over tortoise remains
10 best rucksacks for backpackers

Pack up your troubles: 10 best rucksacks for backpackers

Off on an intrepid trip? Experts from student trip specialists Real Gap and Quest Overseas recommend luggage for travellers on the move
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world