The company plans to invest US$515 million in development and exploration, up from $225 million planned for this year, London-based Premier said Thursday in a statement. It has discovered commercial reserves at Chim Sao, one of three prospects it was exploring in Vietnam.

“What we are starting to see is a weakening in steel prices and weakening in the service sector, particularly on the drilling side,” chief executive officer Simon Lockett said in a phone interview Thursday. “We are going to try to catch as much of that as we can over the next two years.”

The UK company plans to focus on projects in Indonesia, Vietnam and Norway to increase production to 50,000 barrels of oil equivalent a day by 2010. It plans about $1 billion investment in the projects by 2011 and to drill nine exploration wells next year.

Acquisition opportunity

The company has an opportunity to acquire assets that “fit really well with our existing portfolio,” Lockett said. “We’ve got a little more left over to be able to do one or two value-added project acquisitions,” he said.

Premier pumped an average of 36,800 barrels of oil equivalent a day in the first 10 months of the year, 5 percent more than in the year-earlier period. It had $330 million in cash and $275 million in undrawn bank facilities as of October 31.

The Chim Sao “final field development plan has been submitted, and final Vietnamese government approval has now been received,” Premier said in the statement. “In August, the development moved into the execution phase,” with oil production expected to start in 2010, it said.

Premier is cooperating with Vietnam Oil & Gas Group, known as PetroVietnam, in production of equipment and with a Singapore-based contractor in modification of floating oil-production platform and storage facility, or so-called FPSO, for the field, Lockett said.

The company is in talks with France’s Total SA about a rig for drilling at the Ida field in Congo, in addition to a well already planned at the Friday deposit. It plans to cooperate with Kuwait Foreign Petroleum Exploration Co. to drill the area. The partners expect to drill Ida in 2009 if they secure the rig in December, Lockett said.

Premier and its Nordic partner Det Norske Oljeselskap ASA are reassessing plans for development of Norway’s Froy field as oil prices decline. The two companies in September said they expect the deposit to produce 56 million barrels of oil.

“Premier is working closely with the operator and the main contractor to optimize the potential development in light of the lower oil prices and the potentially lower cost environment,” the UK explorer said Thursday.