Lundin Petroleum AB has confirmed that one of its Caspian Sea exploration wells has made a significant oil discovery, though added that the find is likely to be smaller than was initially believed.

In a statement released by the company, it revealed that the find was made at the Morskaya-1 test well, located in the Lagansky block in the north of the sea.

According to chief executive Ashley Heppenstall, the new discovery is "world class", though, given the recent data obtained on the oil levels there, "it appears that the size of the discovery will be below pre-drill estimates".

With Lundin owning a 70 per cent majority share in the Lagansky block, though should the company hold a series of call options on the new find, it is expected that it will receive a 50 per cent minus one share, with Gazporom to hold a 50 per cent share plus one.

As yet, no specific data regarding the size of the find has been released by the firm, though it has been confirmed that the discovery and its subsequent development will have a material impact upon Lundin.