Til toppen

Our Swedish-Norwegian mammoth

Lundin Petroleum’s share price has risen by nearly 7000 per cent since it was listed on the stock exchange in 2001, primarily due to good Swedish-Norwegian collaboration. Swedish capital and Norwegian expertise; a recipe for success that was tested as early as in 1905, when Swedish investments contributed to the founding of Norsk Hydro. Entrepreneur Sam Eyde wanted to take a chance on nitrogen-based fertiliser, but Norway lacked the capital. Through contacts from his university days in Stockholm, he got in touch with Marcus Wallenberg and his family, who invested heavily in what became the industrial adventure that is Norsk Hydro, and later also Yara.

Swedes were keen to share their capital with Norwegians, as long as Norway was the poor neighbour to the west, but when little brother got rich, the Swedes naturally wanted their share of the pie. In 1978, an agreement was spearheaded by Volvo CEO Pehr Gyllenhammar and Prime Minister Oddvar Nordli, where Norway would pay NOK 750 million for 40 per cent of Volvo, and where Volvo, in turn, would create between 3000 and 5000 industrial jobs in Norway. Through Volvo Petroleum, the Swedes would also gain a foothold on the so-called golden block on the Norwegian shelf, Gullfaks. But the Swedish small savers said no; they believed the agreement was too good for the Norwegians. Norway could surely have turned a profit on Volvo, but imagine what profits Sweden could have made off Gullfaks – the money machine that just keeps on going and going?

In 1983, Volvo made a second attempt to enter the Norwegian shelf. Along with Kværner, Volvo purchased shares in Saga Petroleum, Norway’s privately owned oil company, which eventually merged, first with Hydro, then with Statoil.

The founder of Lundin Oil, later also Lundin Petroleum, had much in common with entrepreneur Sam Eyde – a strong vision and a great need for capital. Oil tycoons such as J. Paul Getty and John D. Rockefeller were the idols blazing the trail.

Both owners and employees of oil companies dream of finding a “mammoth” – a field containing more than one billion barrels of oil. In 1976, Lundin Oil made a major gas discovery off Qatar which infused the company with capital for the hunt.

The race was on, and Lundin Oil grew slowly, but surely. The company made discoveries off Oman, Papua New Guinea, Malaysia and a number of other countries. After selling large parts of the oil and gas activities to Talisman, a Canadian company, Lundin Petroleum was established and listed on the Stockholm Stock Exchange in 2001.

Lundin Petroleum then established itself in Norway with Lundin Norway as operator. The portfolio of interesting licences came with a handful of very experienced and competent employees. Some of them had worked together for more than 30 years and had studied seismic maps almost their entire lives. They had backgrounds from Hydro and Saga, they had participated in the establishment of the Norwegian Petroleum Directorate, and they had served their time in ministries and engineering offices. These employees would turn out to be just as valuable as the licences Lundin Petroleum had purchased.

Both owners and employees have worked long and hard. The company produced a total of about 27 million barrels of oil in 2013. The company’s activities create value for all stakeholders – including shareholders, employees, business partners, and the society at large both locally and nationally.

Lundin Petroleum is the first Swedish oil company with oil from its own field in the Norwegian sector of the North Sea. With Norwegian expertise and Swedish capital, Lundin Petroleum and its subsidiary Lundin Norway, discovered its first mammoth in the North Sea. Johan Sverdrup was the world’s largest discovery in 2010, and will increase the company’s production by nearly 400 per cent once it starts producing in 2018. It will also contribute about NOK 2000 billion to the Norwegian State – approx. NOK 400 000 for each Norwegian!