Lundin Energy

Lundin Energy (former Lundin Petroleum) is an independent oil and gas exploration and production company formed from Lundin Oil in 2001 and based in Sweden with focus on operations in Norway. It is listed on the Stockholm Stock Exchange.

Lundin Energy AB
TypePublicly traded Aktiebolag
Nasdaq Stockholm: LUNE
IndustryPetroleum
Founded2001 (2001)
FounderAdolf H. Lundin
HeadquartersStockholm, Sweden
Key people
Alex Schneiter (President and CEO)
Ian Lundin (Chairman)
RevenueUSD 2,948.7 million (2019)[1]
USD 1,970.7 million (2019)[1]
USD 824.9 million (2019)[1]
Total assetsUSD 6,154.5 million (end 2019)[1]
Total equityUSD -1 598.8 million (end 2019)[1]
Number of employees
437 (end 2019)[1]
Websitewww.lundin-energy.com

Lundin Energy had 136 million cubic metres (857.5 million barrels) of oil equivalent of proven plus probable reserves at the end of 2019 and contingent resources amounted to 29.4 million m3 (185 million bbl) of oil equivalent.[2] The company's commercial success is overshadowed by a Swedish war crimes investigation into its past operations in Sudan. Chairman Ian Lundin and CEO Alex Schneiter are the suspects of the preliminary investigation.[3]

In April 2020, the company changed its name from Lundin Petroleum AB to Lundin Energy AB.

Operations

Lundin Energy is 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 Area and Alvheim in the North Sea and the Loppa High in the southern Barents Sea.[4]

In 2010, Lundin Energy discovered the Johan Sverdrup oil field, one of the largest oil discoveries ever made on the Norwegian continental shelf. Lundin Energy has a 20 percent working interest in the Johan Sverdrup oil field development project.[5] Production from Phase 1 started on the 5th of October 2019 and reached plateau in April 2020, with plateau production of 470 thousand barrels of oil per day.[6] Phase 2 will add another processing platform to the field centre which is estimated to increase the processing capacity for the full field to 690 thousand barrels of oil per day.[7] Phase 2 is scheduled to start production in 2022.[8]

Another important part of Lundin Energy´s production 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.[9] Another production hub is in 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.[2]

Lundin Energy 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).

Decarbonisation Strategy

Lundin Energy presented its Decarbonisation Strategy in January 2020, targeting carbon neutrality by 2030.[10] With the Decarbonisation Strategy, the Company has formalised its ongoing commitment to reduce its carbon footprint to the lowest possible levels, through an effective combination of emissions reductions, energy efficiency, targeted research and development and carbon capture mechanisms. Investment in renewable energy projects has also been undertaken to replace the Company´s net electricity consumption. In accordance with the strategy, the Company will limit average operated and non-operated portfolio carbon intensity to below 4kg CO2 per boe and from 2023 to below 2kg CO2 per boe.[11]

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.[12]

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 US$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 million barrels (16 million cubic metres) of oil equivalent. In Tunisia, the Oudna field development (Lundin Petroleum 40% working interest) was successfully completed and production commenced in November 2006.[13]

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.[12] In 2004, Lundin Petroleum acquired a portfolio of producing assets in the UK from DNO AS, doubling Lundin Petroleum's reserves to 21.9 million m3 (138 million bbl) of oil equivalent and increased production to 4,590 cubic metres (28,900 bbl) per day of oil equivalent.[12]

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 16 to 64 million m3 (100 to 400 million bbl) of oil equivalent. The discovery was later renamed Johan Sverdrup oil field.[14]

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 20 to 64 million m3 (125 to 400 million bbl) of oil equivalent.[15]

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 14.8 million m3 (93 million bbl) of oil equivalent. 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.[16][17] The Gemini exploration well was completed as a dry well in March 2015.[18]

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.[19]

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.[20]

Following the approval by the AGM 2020, the company changed its name from Lundin Petroleum to Lundin Energy, to better reflect its decarbonization strategy and broadening of its energy mix.[21]

Leadership

Founder Adolf H. Lundin has founded also Lundin Mining in 1994.[22] Adolf H. Lundin, who was a pioneer in the oil and mining industries, died in 2006 at the age of 73.[23] In June 2015, Alex Schneiter was appointed President and Chief Executive Officer of Lundin Petroleum, effective October 2015.[24] In August 2020, Lundin Energy announced the appointment of Nick Walker as the company's new president and CEO, effective January 1, 2021.[25]

Criticism

In her book Affärer i blod och olja: Lundin Petroleum i Afrika[26] (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.[27]

In June 2010, the European Coalition on Oil in Sudan (ECOS)[28] published the report Unpaid Debt,[29] which called upon the governments of Sweden, Austria and Malaysia to look into allegations that the companies Lundin Petroleum, OMV, and Petronas have been complicit in the commission of war crimes and crimes against humanity whilst operating in Block 5A, South Sudan (then Sudan) between 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. Approximately 12,000 people died and 160,000 were violently displaced from their land and homes, many forever. Satellite pictures taken between 1994 and 2003 show that the activities of the three oil companies in Sudan coincided with a spectacular drop in agricultural land use in their area of operation.[30]

Also in June 2010, the Swedish public prosecutor for international crimes opened a criminal investigation into links between Sweden and the reported crimes. In 2016, Lundin Petroleum's Chairman Ian Lundin and CEO Alex Schneiter were informed that they were the suspects of the investigation. Sweden’s Government gave the green light for the Public Prosecutor in October 2018 to indict the two top executives[31] On 1 November 2018, the Swedish Prosecution Authority notified Lundin Petroleum AB that the company may be liable to a corporate fine and forfeiture of economic benefits of SEK 3,285 (app. € 315 million) for involvement in war crimes and crimes against humanity.[32] Consequently, the company itself will also be charged albeit indirectly, and will be legally represented in court. On 15 November 2018 the suspects were served with the draft charges and the case files. [33] They will be indicted for aiding and abetting international crimes and may face life imprisonment if found guilty. The trial is likely to begin by the end of 2020 and may take several years.

The Swedish war crimes investigation raises the issue of access to remedy and reparation for victims of human rights violations linked with business activities. In May 2016, representatives of communities in Block 5A claimed their right to remedy and reparation and called upon Lundin and its shareholders to pay off their debt.[34] A conviction in Sweden may provide remedy and reparation for a few victims of human rights violations who will be witnesses in court, but not for the app. 200,000 victims who will not be represented in court.

Lundin Energy 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.[35] The company has never refuted publicly reported incriminating facts. Nor has it substantiated its claim that its activities contributed to the improvement of the lives of the people of Sudan.[36] It never showed an interest in the consequences of the oil war for the communities in its concession area. The company maintains a website about its activities in Sudan.[37]

Criticism has also been directed towards former Minister for Foreign Affairs Carl Bildt, a former board member for the company, responsible for ethics.[38][39] 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 report of human rights violation in the Ogaden in connection with activities of Lundin Petroleum.[40]

The trial against Lundin may become a landmark case because of the novelty and complexity of the legal issues that the Swedish court will have to decide. It would be the first time since the Nuremberg trails that a multibillion-dollar company were to be charged for international crimes. The court is likely to answer a number of important legal questions, including about the individual criminal liability of corporate executives vs. corporate criminal liability of organisations, the applicable standard of proof for international crimes before a national court, and the question whether a lack of due diligence is sufficient for a finding of guilt. On 23 may 2019, the T.M.C. Asser Institute for International Law in The Hague organized a Towards criminal liability of corporations for human rights violations: The Lundin case in Sweden.[41]

Thomas Alstrand from the Swedish Prosecution Authority in Gothenburg on 13 February 2019 announced that a second criminal investigation had been opened into threats and acts of violence against witnesses in the Lundin war crimes investigation.[42] They have allegedly been pressured not to testify in court. Several witnesses have been granted asylum in safe countries through UNHCR supported emergency protection procedures. The company has confirmed that its CEO and Chairman have been officially informed by the prosecutor about the allegation, noting that it believes that it is completely unfounded. Witness tampering is usually intended to prevent the truth from being exposed in court. The second investigation into obstruction of justice seems to contradict the company’s assertions of its good faith cooperation with the war crimes investigation.

Once court hearings commence in Sweden, the Dutch peace organization PAX and Swedish NGO Global Idé will provide daily English language coverage of proceedings, expert analyses and comments on the website Unpaid Debt.[43]

References
  1. "Annual Report 2019" (PDF). Lundin Petroleum. Retrieved 2020-05-26.
  2. "Annual Report 2019" (PDF). Lundin Petroleum AB. Retrieved 26 May 2020.
  3. "Swedish oil bosses set to be charged over South Sudan deaths". Financial Times.
  4. "Operations". Lundin Petroleum AB. Retrieved 15 December 2017.
  5. "License Summary". Lundin Energy. Retrieved 26 May 2020.
  6. "Increased plateau production at Johan Sverdrup". Lundin Energy. Retrieved 26 May 2020.
  7. "Johan Sverdrup project". Lundin Energy. Retrieved 26 May 2020.
  8. "Further improvements on the Johan Sverdrup project". GlobeNewswire. 2017.
  9. "First oil from the Edvard Grieg field, offshore Norway". GlobeNewswire. 30 November 2015.
  10. "Decarbonisation Strategy Press release". Lundin Petroleum. Retrieved 26 May 2020.
  11. "Decarbonisation Strategy". Lundin Energy. Retrieved 26 May 2020.
  12. "History". Lundin Petroleum AB. Retrieved 15 December 2017.
  13. "Annual Report 2006" (PDF). Lundin Petroleum. Retrieved 2011-10-21.
  14. "Lundin Petroleum makes a significant discovery offshore Norway". Globe Newswire.
  15. "Lundin Petroleum finds oil and gas in the Alta well in PL609 in the Barents Sea". Globe Newswire. 14 October 2014.
  16. "Lundin Petroleum starts 16/1-24 exploration well drilling on Gemini prospect". 16 February 2015.
  17. "Lundin spuds test well in offshore Norway Gemini prospect". Petro Global News. Retrieved 18 February 2015.
  18. "The Gemini exploration well, offshore Norway has been completed as a dry well". Globe Newswire. 17 March 2015.
  19. "Annual Report 2015" (PDF). Lundin Petroleum AB. Retrieved 15 December 2017.
  20. "Lundin Petroleum proposes spin-off of its non-Norwegian producing assets into an independent oil and gas company". Globe Newswire.
  21. "Lundin Petroleum changes name to Lundin Energy". Lundin Petroleum.
  22. Company History Lunding mining. Investors
  23. "History". Lundin Petroleum AB. Retrieved 15 December 2017.
  24. "Alex Schneiter appointed as President and CEO of Lundin Petroleum". GlobeNewsWire. GlobeNewsWire. 22 June 2015.
  25. "Lundin Energy Appoints New CEO". www.rigzone.com. Retrieved 2020-08-20.
  26. Järtelius, Arne. "Blod och olja". Nationalencyklopedin. Retrieved 2011-10-21.
  27. Lundell, Kerstin (2010). "Tystnadens triumf". Ordfront Magazine. Archived from the original on 2010-08-22.
  28. "ECOS Database". European Coalition on Oil in Sudan.
  29. "Unpaid Debt, The legacy of Lundin, Petronas, and OMV in Block 5A, Sudan, 1997-2003". European Coalition on Oil in Sudan. Retrieved 28 June 2019.
  30. "Satellite mapping Block 5A" (PDF). Prins Engineering. 30 August 2009. Retrieved 28 June 2019.
  31. "Lundin faces prosecution for Sudan oil war abuses". Justice Info. 23 October 2018. Retrieved 28 June 2019.
  32. "Regulatory disclosure". Lundin Petroleum website. Retrieved 28 June 2018.
  33. "Lundin Petroleum Receives Final Notice before Indictment". Retrieved 29 June 2019.
  34. "Victim's Remedy Claim". Unpaid Debt. Retrieved 2 July 2018.
  35. "Lundin Energy Human rights Policy". Retrieved 23 April 2020.
  36. "Corporate Governance Report 2015" (PDF). Retrieved 28 June 2019.
  37. "Lundin History in Sudan".
  38. PM Nilsson, "Bildt måste gå" Archived 2007-02-12 at the Wayback Machine, Expressen, 11 January 2007 (in Swedish).
  39. Fredrik Malm, "Bildt måste byta politik eller avgå", Expressen, 15 January 2007 (in Swedish).
  40. Reporters Without Borders hails Swedish journalists’ release Reporters Without Borders 10 September 2012
  41. "Towards criminal liability of corporations for human rights violations: The Lundin case in Sweden".
  42. "Lundintoppar misstänks för anstiftan till övergrepp i rättssak" [Lundin top management suspected of perverting the course of justice] (in Swedish). 13 February 2019. Retrieved 28 June 2019.
  43. "Unpaid Debt".
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