Lundin Operations in South Sudan

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History

Lundin entered Sudan through its subsidiary International Petroleum Corporation (IPC) in 1991. From 1997 until 2003, IPC held a 40.375% share in Block 5A in Sudan, which would become the site of violent conflict after oil exploration began in the area. In May 1998, IPC was folded into its parent, Lundin Oil AB.[1] Lundin Oil was bought by Talisman in 2001 and the Sudan holdings were transferred to a new company called Lundin Petroleum.[2] In June 2003, Lundin sold its interest in Block 5A to Petronas for US $142.5 million, while retaining a 24.5% interest in Block 5B.[1]

As of 2009, Lundin’s role in Sudan’s oil was limited to a non‐operator stake of 24.5% in Block 5B, operated by Petronas and Sudapet for the White Nile Petroleum Operating Company (WNPOC) consortium.[3] Lundin began drilling operations in Block 5B at an exploration well on the western flank of the Muglad basin in February 2008.[4]

Complicity in conflict and displacement

Violent conflict in Block 5A

In 1997, Lundin Oil AB had formed a consortium in which it held 40.4 percent ownership, in partnership with Petronas from Malaysia (28.5 percent), OMV from Austria (26.1%), and the Sudanese state-owned oil company Sudapet (5 percent). Lundin was the leader of the consortium and in this capacity acquired a concession from the Sudanese government in Block 5A, which at the time was not under full government control.[1]

The start of oil exploration set off a vicious war in the area and between 1997 and 2003, according to the European Commission on Oil in Sudan (ECOS), "international crimes were committed on a large scale" in what was essentially a military campaign by the Sudanese government to secure and take control of the oil fields in Block 5A. ECOS wrote in a June 2010 report that it believed that the Lundin consortium - including the companies Lundin, Petronas and OMV - may have been complicit in the commission of war crimes and crimes against humanity.[1]

In order to guarantee security for the consortium and facilitate oil exploration, according to ECOS, the Sudanese government began clearing the population in this area using a variety of tribal militias, the country’s army and air force, and Arab muraheleen units. Using artillery, ground troops, helicopter gunships, and high-altitude bombers against the civilian population, the government of Sudan deliberately forced almost 200,000 civilians off their lands and killed thousands. Among the reported crimes, according to ECOS, were arbitrary attacks on civilians, unlawful killing, arson, looting, rape, enslavement, underage recruiting, torture, and theft.[1]

The ECOS report alleged that, throughout the war in Block 5A, the Lundin consortium worked alongside the perpetrators of war crimes. The consortium’s infrastructure enabled the commission of crimes by others, expanding the geographic reach of armed groups, enabling year-round access to formerly isolated communities, and facilitating the Sudan Armed Forces (SAF) and armed groups to violently displace much of the population in Block 5A. The report also suggested there were grounds to investigate whether the Lundin consortium provided financial and material support to the agencies carrying out the crimes.[1]

Lundin, for its part, has denied that it violated the norms of international law and that it participated in illegal acts. While present from 1997 to 2003, Lundin Petroleum AB made a total net profit of US $92.6 million in Block 5A.[1]

Formal investigation

In June 2010 Swedish public prosecutor Magnus Elving launched a formal investigation into the allegations. In Sweden, much of the attention focused on the potential for criminal prosecution of Foreign Minister Carl Bildt, who was a member of Lundin's board from 2000-06.[5]

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 "The Legacy of Lundin, Petronas and OMV in Block 5A, Sudan 1997 - 2003, ECOS, June 2010.
  2. "Lundin: war crimes allegations 'unfounded', The Local, 18 March 2012.
  3. "Fact Sheet Nine: The Main International Oil Companies Present in Sudan, Understanding Sudan, 2009.
  4. "Swedish Oil Firm Resumes Drilling in South Sudan, Panyijiar News blog, 18 February 2008.
  5. "Swedish oil company under scrutiny after Sudan war crimes report, Government of Southern Sudan Natural Resources Management Group, 23 June 2012.