Lundin Petroleum

Lundin Petroleum AB
Publicly traded Aktiebolag
Traded as Nasdaq Stockholm: LUPE
Industry Petroleum
Founded 2001 (2001)
Founder Adolf H. Lundin
Headquarters Stockholm, Sweden
Key people
 Alex Schneiter (President and CEO), Ian Lundin (Chairman)
Revenue USD1,159.9 million (2016)[1]
USD -355.8 million (2016)[1]
USD -499.3 million (2016)[1]
Total assets USD 5,202 million (end 2016)[1]
Total equity USD -352.2 million (end 2016)[1]
Number of employees
 566 (end 2016)[1]
Website www.lundin-petroleum.com

Lundin Petroleum is an independent oil and gas exploration and production company formed in 2001 and based in Sweden with focus on operations in Norway. It is listed on the Stockholm Stock Exchange. Market capitalisation at year end 2016 was SEK 67 billion which made Lundin Petroleum the largest independent E&P company in Europe in 2016, measured by market capitalisation.

Lundin Petroleum had 714.1 MMboe of certified reserves at the end of 2016 of which 96 percent was in Norway and contingent resources amounted to 249 MMboe.[2]

Operations

Lundin Petroleum has become fully focused on Norway where the company holds over 60 licences. The majority are exploration licences and about ten percent are producing fields. Core areas are the Utsira High and Alvheim in the North Sea and the Loppa High in the southern Barents Sea.[3]

In 2010, Lundin Petroleum discovered the Johan Sverdrup oil field, one of the largest oil discoveries ever made on the Norwegian continental shelf. Resources are estimated to between 2.0 and 3.0 billion barrels of oil equivalent. At peak production level, gross production from Johan Sverdrup is expected to be over 660,000 bopd which will represent around 25 percent of all Norwegian petroleum production at that time.[4]

Lundin Petroleum’s main producing field is the Edvard Grieg oil field, located in PL338 on the Utsira High in the central North Sea. The Edvard Grieg field was discovered in 2007 and started production in November 2015.[5] The second largest production hub is the Alvheim area, located in the central part of the North Sea, and production from the fields in this hub started in 2008, 2010 and 2015.[6]

Lundin Petroleum has a 22.6 percent working interest in the Johan Sverdrup oil field development project. The first phase of the development is expected to start production in late 2019 with an estimated production capacity of 440 Mbopd. Phase 2 will add another processing platform to the field centre which is estimated to increase the processing capacity for the full field to 660 Mbopd. Phase 2 is scheduled to start production in 2022.[7]

Lundin Petroleum is one of the largest operated acreage holders and has been one of the most active explorers in Norway over the past 10 years. A status that continues today. The largest discoveries have been made in the Utsira High (Johan Sverdrup oil field, Edvard Grieg oil field) and in the southern Barents Sea (the Alta, Gohta and Filicudi discoveries). By the end of 2016, Lundin Petroleum had drilled a total of 84 exploration and appraisal wells in Norway.[8]

History

The Lundin family has been involved in oil exploration and production for over thirty years. Lundin Petroleum can trace its roots back to the early eighties in the form of International Petroleum, then International Petroleum Corporation, followed by Lundin Oil in the late nineties before emerging as Lundin Petroleum in 2001.[9]

The company was formed in 2001 following the takeover of Lundin Oil AB by Canadian independent Talisman Energy, Lundin Petroleum AB is a Swedish oil company traded on the Stockholm Stock Exchange. In the summer of 2003, Lundin Petroleum sold its working interest in Block 5A to Petronas Carigali for USD 142.5 million. In 1998 the company discovered the En Naga North and West field in southern part of the Sirte Basin, Libya. After a successful appraisal program in 1998 and 1999 the field was declared. The commercial and development program commenced. Development included the construction of a central production facility, 100 km pipeline together with the drilling of 20 production, 15 injector and 15 water supply wells. Recoverable reserves were estimated to be approximately 100 mmbbls. In Tunisia, the Oudna field development (Lundin Petroleum 40% working interest) was successfully completed and production commenced in November 2006.[10]

In 2002, Lundin Petroleum acquired Coparex International from BNP Paribas, adding exploration and production assets in France, Netherlands, Tunisia, Venezuela, Indonesia and Albania to the existing portfolio. The acquisition transformed Lundin Petroleum from a pure exploration company into a larger E&P player. In early 2003, Lundin Petroleum entered Norway for the first time by acquiring 75 percent of the shareholding in Norwegian OER oil.[9] In 2004, Lundin Petroleum acquired a portfolio of producing assets in the UK from DNO AS, doubling Lundin Petroleum’s reserves to 137 million boe and increased production to 28,900 boepd.[9]

In April 2010 it demerged its assets on the United Kingdom Continental Shelf into Petrofac's Energy Developments unit to form the stand-alone company EnQuest.

In 2010, Lundin Petroleum made a large discovery on the Avaldsnes prospect in PL501 on the Utsira High in the North Sea, estimated to contain recoverable resources of 100 to 400 million barrels of oil equivalent (MMboe). The discovery was later renamed Johan Sverdrup oil field.[11]

In 2014, Lundin Petroleum made an oil and gas discovery on the Alta prospect in PL609 on the Loppa High in the southern Barents Sea. The discovery is located 20 km northeast of the Gohta discovery well and some 160 km from the Norwegian coast and is estimated to contain resources of 125 to 400 MMboe.[12]

In February 2015, it has started drilling exploration well 16/1-24, located in the Gemini prospect of the North Sea. The well is located in PL338C south-west of the Edvard Grieg field, offshore Norway. It will test the reservoir properties and hydrocarbon potential of Lower Paleocene aged sandstones of the Ty Formation. The Gemini prospect is estimated to contain unrisked, gross prospective resources of 93 million barrels of oil equivalent (Mmboe). The Island Innovator semi-submersible drilling rig will be used to drill the well to a planned total depth of 2,192m below mean sea level.[13][14] The Gemini exploration well was completed as a dry well in March 2015.[15]

In 2015, three field developments were completed and started production: the Bøyla field and the Edvard Grieg oil field in Norway and the Bertam field in Malaysia.[16]

In April 2017, Lundin Petroleum spun-off its producing assets outside of Norway into a new company called International Petroleum Corporation (IPC). Following the spin-off, Lundin Petroleum is a fully Norway focused company.[17]

Leadership

Founder Adolf H. Lundin has founded also Lundin Mining in 1994.[18] Adolf H. Lundin, who was a pioneer in the oil and mining industries, passed away in 2006 at the age of 73.[19] In June 2015, Alex Schneiter was appointed President and Chief Executive Officer of Lundin Petroleum, effective October 2015.[20]

Criticism

In her book Affärer i blod och olja: Lundin Petroleum i Afrika[21] (Business in blood and oil: Lundin Petroleum in Africa) journalist Kerstin Lundell claims that the company had been complicit in several crimes against humanity, including death shootings and the burning of villages.[22]

In June 2010, ECOS (European Coalition on Oil in Sudan) published the report Unpaid Debt, which called upon the governments of Sweden, Austria and Malaysia to look into allegations that the companies Lundin, OMV and Petronas had been complicit in the commission of war crimes and crimes against humanity whilst operating in Sudan during the period 1997-2003. The reported crimes include indiscriminate attacks and intentional targeting of civilians, burning of shelters, pillage, destruction of objects necessary for survival, unlawful killing of civilians, rape of women, abduction of children, torture, and forced displacement. thousands of people died and almost two hundred thousand were violently displaced. Satellite pictures taken between 1994 and 2003 show that the Lundin Consortium's activities in Sudan coincided with a spectacular drop in agricultural land use in its area of operation.[23][24] Consequently, the Swedish public prosecutor for international crimes opened a criminal investigation into links between Sweden and the reported crimes. Lundin Petroleum has confirmed that the company is under investigation. The company strongly believes that it was a force for good in Sudan and that its activities contributed to the improvement of the lives of the people of Sudan.[25] The investigation is expected to be finalized late 2016/early 2017. Suspects of international crimes in Sweden can face charges up to 18 years imprisonment. Total material damages suffered by the population have been estimated by ECOS to have been in excess of $600 million.

The criminal investigation raises the issue of access to remedy and reparation for victims of human rights violations linked with business activities. A criminal conviction in Sweden can only provide remedy for victims who are represented before the court. Lundin Petroleum endorses the UN Guiding Principles on Business and Human Rights, acknowledging the duty of business enterprises to contribute to effective remedy of adverse impact that it has caused or contributed to.[26] However, the company never substantiated its claim that its activities contributed to the improvement of the lives of the people of Sudan rather than having adversely affected them.[27]

Criticism has also been directed towards former Minister for Foreign Affairs Carl Bildt, a former board member for the company, with oppositional voices questioning his suitability as foreign minister.[28][29]

Ethiopia arrested two Swedish journalist Johan Persson and Martin Schibbye and held them for 14 months before the release. Conflict Ethiopian Judicial Authority v Swedish journalists 2011 was caused as the journalist studied the human rights violation claims in Ogaden by an oil explorer in a case connected to Lundin Petroleum.[30]

On 20 October 2016, Dagens Industri reported that CEO Alex Schneiter and Chairman Ian Lundin are to be interrogated by the Swedish police as suspects of complicity in war crimes.[31]

On 28 November 2016, chairman Ian H. Lundin addressed Lundin Petroleum’s shareholders in an open letter, stating that there are no grounds for any allegations of wrongdoing against any representative of Lundin. The company published a website with details on its past activities in Sudan.[32]

References

  1. 1 2 3 4 5 6 "Annual Report 2016". Lundin Petroleum. Retrieved 15 December 2017.
  2. ↑ "Annual Report 2016" (PDF). Lundin Petroleum AB. Retrieved 15 December 2017.
  3. ↑ "Operations". Lundin Petroleum AB. Retrieved 15 December 2017.
  4. ↑ "Johan Sverdrup". Statoil. Retrieved 15 December 2017.
  5. ↑ "First oil from the Edvard Grieg field, offshore Norway". GlobeNewswire.
  6. ↑ "Annual Report 2016" (PDF). Lundin Petroleum AB. Retrieved 15 December 2017.
  7. ↑ "Further improvements on the Johan Sverdrup project". GlobeNewswire.
  8. ↑ "Annual Report 2016" (PDF). Lundin Petroleum AB. Retrieved 15 December 2017.
  9. 1 2 3 "History". Lundin Petroleum AB. Retrieved 15 December 2017.
  10. ↑ "Annual Report 2006" (PDF). Lundin Petroleum. Retrieved 2011-10-21.
  11. ↑ "Lundin Petroleum makes a significant discovery offshore Norway". Globe Newswire.
  12. ↑ "Lundin Petroleum finds oil and gas in the Alta well in PL609 in the Barents Sea". Globe Newswire.
  13. ↑ "Lundin Petroleum starts 16/1-24 exploration well drilling on Gemini prospect".
  14. ↑ "Lundin spuds test well in offshore Norway Gemini prospect". Petro Global News. Retrieved 18 February 2015.
  15. ↑ "The Gemini exploration well, offshore Norway has been completed as a dry well". Globe Newswire.
  16. ↑ "Annual Report 2015" (PDF). Lundin Petroleum AB. Retrieved 15 December 2017.
  17. ↑ "Lundin Petroleum proposes spin-off of its non-Norwegian producing assets into an independent oil and gas company". Globe Newswire.
  18. ↑ Company History Lunding mining. Investors
  19. ↑ "History". Lundin Petroleum AB. Retrieved 15 December 2017.
  20. ↑ "Alex Schneiter appointed as President and CEO of Lundin Petroleum". GlobeNewsWire. GlobeNewsWire.
  21. ↑ Järtelius, Arne. "Blod och olja". Nationalencyklopedin. Retrieved 2011-10-21.
  22. ↑ Lundell, Kerstin (2010). "Tystnadens triumf" (2). Ordfront Magazine. Archived from the original on 2010-08-22.
  23. ↑ "UNPAID DEBT The Legacy of Lundin, Petronas and OMV in Sudan, 1997-2003". European Coalition on Oil in Sudan. June 8, 2010. Retrieved 2011-10-21.
  24. ↑ Sudan Oilgate article on IPS Archived 2012-04-05 at the Wayback Machine.
  25. ↑ (PDF). 2015 https://www.lundin-petroleum.com/Documents/cr_corp_gov_15_e.pdf. Missing or empty |title= (help)
  26. ↑ (PDF) https://www.lundin-petroleum.com/.../cr_humanrights_policy_e.pdf. Missing or empty |title= (help)
  27. ↑ (PDF). 2015 https://www.lundin-petroleum.com/Documents/cr_corp_gov_15_e.pdf. Missing or empty |title= (help)
  28. ↑ PM Nilsson, "Bildt måste gå" Archived 2007-02-12 at the Wayback Machine., Expressen, 11 January 2007 (in Swedish).
  29. ↑ Fredrik Malm, "Bildt måste byta politik eller avgå", Expressen, 15 January 2007 (in Swedish).
  30. ↑ Reporters Without Borders hails Swedish journalists’ release Reporters Without Borders 10 September 2012
  31. ↑ Lundintoppar förhörs om Sudan-affärer Dagens Industri 20 October 2016
  32. ↑ ""Open Letter to Lundin Petroleum's Shareholders." www.lundinhistoryinsudan.com".
  • Official website
  • Bloomberg Businessweek.com: Company profile of Lundin Petroleum
  • Human Rights Watch.org: "Sudan, Oil, and Human Rights" — (September 2003, ISBN 1-56432-291-2)
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