Up against the wall

Lundin petroleum’s AGM was marked by very tough words and major antagonisms.


Division Ian Lundin won the struggle for the votes. But suffered a swingeing defeat as regards convincing the shareholders about his own and the board’s line. 22%, many more than expected, voted to investigate the oil giant’s activities in Sudan. Now chairman Ian Lundin is managing a divided company.


There were only a few minutes remaining of the meeting when something remarkable happened at the AGM. The author Kerstin Lundell, who has written a prize-winning book about Lundin petroleum’s activities in Sudan, was asking questions of the management about why the company has not reacted to United Nations reports in the matter. Suddenly, chairman Ian Lundin had had enough and announced from the podium that “I do not want to hear any more lies, no more lies now”. At the same moment a female steward at the meeting stepped up and literally tore the microphone from Kerstin Lundell’s hands.


“I was completely shocked, shaky afterwards. It was almost violent when this steward tore the microphone from me. But at the same time they are messing up so evidently. How stupid can you be,” said a jittery Kerstin Lundell minutes after the incident.


Ian Lundin waves aside the incident:


“Standing up like that and giving incorrect facts is not right. Then you have to talk to those of us on the board afterwards.”


Is the AGM not an occasion when shareholders should be allowed to ask questions?


“No, not in that way. It was the wrong moment,” said Ian Lundin, before he disappeared into the crowd, at the same time as a Dixie jazz band entered the room and blasted out loud jazz music.


The microphone incident was a good picture of the way the AGM developed, with very tough words and major antagonisms.


The former Director of Public Prosecutions Sven-Erik Alhem, has been engaged by Lundin Petroleum as a legal expert. He saw that it was “bullshit” to believe that an independent enquiry could be held separately from the ongoing preliminary criminal investigation.


“Do not take the risk,” he warned the shareholders in the crowded Hall of Mirrors at the Grand Hotel in Stockholm.


And the shareholders did not do that. Around 78% voted against the proposal to set up a company enquiry into the awful events in Sudan between 1997 and 2003, and Lundin Petroleum’s possible involvement. More than 12,000 people were killed and 160,000 were driven out.


But nevertheless 22% voted for an enquiry. This was the important figure because it was many more than expected. The Swedish institutions who said yes, Folksam, Robur Swedbank and Andra AP-fonden, cannot gather nearly as many votes. Clearly many foreign institutions have also agreed to an independent enquiry.


“What we see here is a deeply divided company. More than 20% of the shareholders are opposed to the management and the board on an extremely important issue. This shows clearly how Lundin Petroleum does not have the confidence of international investors just now, and this puts at risk the company’s future growth,” said Egbert Wesselink, the representative for ECOS, European Coalition on Oil in Sudan.


It is ECOS and Folksam who each have encouraged the board to appoint an independent enquiry. Wesselink was very critical in his speech at the AGM:


“I think there is reason to suspect that Lundin had people on its payroll who committed war crimes and crimes against human rights then, 10 to 15 years ago in Sudan. You in management and on the board made a major error of judgement, and many people in Sudan are still waiting for you to take responsibility for it,” said Egbert Wesselink to the shareholders.


Ian Lundin dismissed the accusations from Ecos. He also went on the attack against recent media reporting of the company.


“It is a shameful process that has gone on in the Swedish media. They have done all they can to name and shame us and put us in a negative light. I am also very critical of Ecos’ representative here. I hope that you shareholders can see through his methods and merely for that reason vote against his proposal,” said Ian Lundin, who also called into question Ecos as an organisation.


Who stands behind the organisation, wondered Lundin, and demanded better information on their website.


“Many shareholders in this room have been faithful to Lundin Petroleum for many years. Mr Wesselink from ECOS is not one of them. And once more I would stress that we have never employed child soldiers, we have not driven off any local people in connection with oil drilling, and we have not made any mistakes of the kind that ECOS is accusing us of,” said Ian Lundin, and took the opportunity of supporting CEO Ashley Heppenstall’s controversial statement last week in Dagens Industri that shareholders who do not trust the management of the company and its decisions should sell their shares.


“This is also the view of the board,” said Ian Lundin.


Both he and CEO Ashley Heppenstall talked a great deal about the Lundin Foundation. The foundation has done great work in Sudan and other places in the world to improve healthcare, schools and infrastructure for the local population, according to the company.


They also stressed time and again how Lundin’s oil drilling in many parts of the world has promoted local growth and improved living standards.


But Egbert Wesselink was not impressed.


“All the arrogance and anger at today’s meeting from the CEO and chairman shows that this management is all too emotionally involved in this question to deal with it in a professional manner,” said Egbert Wesselink after the meeting.



The Lundin family is a major shareholder in the company


Lundin Petroleum is a Swedish oil and gas prospecting and production company with assets in Europe, Africa, Russia and Asia.


Lundin Petroleum has its main office in Stockholm but the management is in Switzerland.


The Lundin family, which has considerable interests in the commodities sector, is the major shareholder in Lundin Petroleum.


The company’s CEO is Ashley Heppenstall, and its chairman is Ian Lundin.


On August 1 the next interim financial statement is due from Lundin Petroleum.


Lundin Petroleum

Major shareholders Percent

The Lundin family 31.7

Swedbank Robur 2.8

The Norwegian state 1.7

SHB funds 1.4

SEB funds 1.3

AMF 1.2

Fjärde AP-fonden 1.2

Första AP-fonden 1.1

Tredje AP-fonden 0.9

Andra AP-fonden 0.8



The major Norwegian find will go on stream from 2018


SEK 45 billion is the stock exchange value of Lundin Petroleum.


Production launch of Lundin Petroleum’s Norwegian find in the Johan Sverdrup field is expected to begin in the fourth quarter of 2018.


Anticipated production stretches to 2050.