The Lundin Legacy Continued | ?️ LatestLY

From childhood, it was clear that Adolf Lundin’s sons would take over the family business. When Lukas Lundin was twelve, and Ian Lundin was ten, their father sat them down and asked the boys to decide who will take over the two divisions of the Lundin Group’s empire of industry—mining and gas and oil. In a small café in the French Riveria, the future of the family group had been settled.

At the turn of the century and on the eve of his death, Adolf still showed every sign of continuing to run the empire he had built. Even though Lukas and Ian had worked up the ranks to key positions of responsibility, their father found little reason to give up the reins entirely. “I would not enjoy life as a retired person,” he once claimed.

But unlike many other entrepreneurs of note who agonised over the day they let someone else take charge, Adolf had long encouraged his sons to step up to the challenge of running a global energy conglomerate. After that fateful day in the café, both brothers were prepared for their careers by spending their summers in high school prospecting for uranium in North America with Eurocan, a Lundin Group company, instead of enjoying the holidays back in Geneva with friends.

Adolf had no interest in telling his sons what university they went to, as long as they studied petroleum engineering. Lukas graduated from the New Mexico Institute of Mining and Technology, before managing gold exploration projects in Canada and Sierra Leone with Eurocan. Ian attended the Institute for a time before he opted to leave his brother’s shadow and finish his studies at the University of Tulsa in Oklahoma. Upon graduation he left for the Prinos Oil Field in the Aegean Sea as a trainee for the German oil company, Wintershall.

Eventually the brothers converged in Egypt, where Adolf had recently secured major exploration rights. After a failed drill rig and the firing of the Shell project managers, “Egypt turned out to be a trial by fire,” Lukas reflected. Both men eventually found themselves running operations out of the technical offices in Cairo and Dubai as unexperienced, yet eager engineers.

Some twenty years later, at Lundin Petroleum’s first annual general shareholders’ meeting, Ian Lundin become Chairman of the board at age forty-two. With his son now at the helm of his proudest acquisition, Adolf predicted it would be “at least as big as Lundin Oil before we sold it.”

When it comes to styles of leadership, Lukas has largely followed his father’s example as Chairman of Lundin Mining. Both have enjoyed working in time with the stock market and making fast, often sensational deals. Lukas also shares the same affinity in keeping strong, decades-long relationships with top players in the financial markets. Ian is more reserved by nature and less impressed by risk-taking.

Such disparate personalities come out in force at the helm of their respective boards. Ian has weathered the storms of the gas and oil sector –an industry far more exposed to the public eye than mining– with not only remarkable professionalism and poise, but rare foresight.

“Adolf is no company builder,” a long-time family friend once remarked, “but Ian is.” Under his chairmanship, Lundin Petroleum rebranded in 2020 to Lundin Energy to reflect the company’s increased role in the green energy transition to sustainable oil. This change is not just in name, but in operational practice and ethos. In April of this year, Lundin Energy has sold what it claims is the world’s first certified, carbon neutrally produced oil from its Edvard Grieg field in the Norwegian North Sea.

According to company representatives, the newly established drill site been certified as a low-carbon field for full life-of-field emissions (3.8 kg of CO2 per boe), including exploration, development, and operation, which is five times less than the global average. Next up are plans to certify low-carbon oil from the nearby Sverdrup field – Western Europe’s biggest – which Lundin co-owns with a consortium of partners.

The trade to Italian refiner Saras serves as a monumental milestone for the energy industry at large. It has become commonplace for oil and gas companies to offset their carbon emissions through carbon credits, financial instruments generated by projects that reduce or avert greenhouse-gas emission. However, the Edvard Grieg production process has been independently certified as low-carbon, making it the very first of its kind and setting Lundin on track to become carbon neutral by 2025.

Though recognised by most governments, critics see carbon credits as a means of compensating for unsustainable practices, instead of changing the practices themselves. Lundin Energy has instead invested research and development into carbon capture technology to ensure the provenance of their barrels are green, such as an innovative nitrogen oxide gas (NOx) scrubbing system. Lundin’s West Bollsta drilling rig, custom built with the system in place, “has the lowest NOx emissions on the Norwegian shelf, maybe even worldwide,” says Axel Kelley, Environmental Manager in Lundin Energy Norway. The company also plans to spend $35 million to plant 8 million trees in northern Spain and Ghana – an initiative Lundin says will allow it to generate its own credits to offset greenhouse gas emissions from its fossil fuels.

In line with what could be described as ‘the Adolf way,’ Ian Lundin has not shied away from thinking big to ensure that Lundin Energy stays at the forefront of technological and industry standards. As his father defined the market through his mining operations know-how, Ian, the company builder, understands that tomorrow’s profit will only come through a shrewd understanding of where the crude market is heading and the potential value that can be realise through efficient, industry-leading emissions reductions. The combination of responsible operations while making transparent the provenance of natural resources today means being able to operate effectively in difficult environments, which is at the core of Lundin Group’s roots as a tried-and-true exploration company.

The Lundin brothers are aware of how much the industry has changed since their father predicted the arrival of “twenty golden years” in 2002. Oil has fallen out of favour with environmental, social, and corporate governance (ESG) investors and the terrains of conflict have changed from the global south to a cutthroat regulatory landscape.

Countries raised $53 billion last year by charging firms for emitting carbon dioxide (CO2), up almost 18% from 2019 as some imposed new levies and prices in some existing schemes rose, the World Bank said in a recent report. There were 64 global carbon pricing instruments in operation in 2021, compared with 58 in 2020, covering more than 21% of global greenhouse gas emissions, up from 15.1% last year, the report also noted. Lundin Energy now principally operates in the world’s largest emissions trading system (ETS) as made mandatory by the European Union sixteen years ago.

“We are opportunistic and quick,” Lukas said once when asked what set Lundin Group apart. “If we do not move quickly, we lose our advantage over the larger and slower giants.” Lundin Energy’s Norwegian operations are case in point of this advantage. Together, the brothers have carefully designed a shared future for the Group in a world where investors, activists and regulators demand action to stop climate change. But it is also designed to profit: companies have begun seeking a premium price for what they call ‘clean’ petroleum products.

One would imagine that their father would be proud, just as Adolf was proud of his own ego, considering it as the kinder and more productive twin to arrogance. He believed he could do the impossible, and he did. His lasting global empire is a testament to that, and he oversaw it with great care and certainty.

He held himself and his operations to such high standards, that, regarding Lundin’s operations in Sudan, Adolf was defiant. “We bring Sudan out of misery,” he declared on the cover of Dagens Industri in March 2001. He was a strident believer in the economic benefits to be had from responsibly developed natural resources and in alleviating poverty in the communities Lundin worked with. By creating jobs, stability, and security on the ground, prosperity would follow.

His vision of development gave rise to the Lundin Foundation in 2006, a non-profit that is guided by the principles that Adolf’s mother, Maria expressed at a shareholders meeting in 1996. “The first is that we have a good relationship with the people in the [host] country,” she said. “The second is that we have the best equipment and skilled personnel; and the third is that we have economic success.”

Yet it is important to remember his sons have to bear the world in the public eye just as he did, but with the added pressures of increased scrutiny, regulations, and transparency in the energy markets. There are still many lessons to be learned from Adolf Lundin’s legacy. Perhaps most prudent for today is his belief that success was possible only through decisiveness, determination, a good dose of fearlessness, and above all, a capacity to think big when making investments. This mentality can and should be prioritised in the future of green energy development.

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