Billionaire bros. behind Suffield block buy
Billionaire brothers who adventure race for charity and sail $100-million luxury yachts are now set up to do business in southeastern Alberta.
This week’s purchase of the Suffield drilling block by International Petroleum Corp provided some reassurance for the local oilpatch, which has been idled since 2015.
It also sent reporters scurrying to learn more about the company that just last April was listed on the Toronto Stock Exchange.
IPC is an offshoot of the Lundin Group of companies, which is controlled by family members and operated by brothers Lukas and Ian Lundin. Their combined net worth was estimated by Bloomberg in 2016 to be US$5 billion.
Business reporting over the last decade paints the umbrella company as a going concern that can go far afield to find projects it considers undervalued, then pounces during the busts of resource sector’s business cycles.
“The Lundin Family are serious primary resource investors,” said Mike Nicholson, CEO of International Petroleum, while discussing the Suffield purchase with the News this week.
He estimates that publicly listed companies that have the Lundins as major shareholders would have a cumulative market capitalization of about US$15 billion.
“From an executive management perspective, having major shareholders that are passionate about the primary resource business, understand the long-term nature of that business, makes it extremely easy for us. You have strong support, understanding and backing.
“If you look at the track record, it’s pretty impressive.”
IPC is actually the re-emergence of the brand on the original oil interests begun by family patriarch Adolph Lundin.
His first major petroleum strike was in the mid-1970s with the discovery of some of the worlds largest offshore natural gas deposits near Qatar.
A corporate history places operations in the North Sea, Australia, Egypt, Libya, Sudan, Russia and elsewhere. Base and precious metal exploration projects have similarly spanned the globe.
It has developed diamonds, uranium, most base metals like zinc, copper and nickel, as well as gold and other precious metals in areas ranging from Equator to Africa.
Adolph died in 2006. Lukas Lundin, who oversees the entity’s mining interests, is based in Vancouver and recently commissioned the 270-foot luxury yacht, the Savannah. He has also competed in the Paris to Dakkar motorcycle rally and has also ridden from Cairo to Cape Town.
Less information is publicly available about Ian Lundin, who handles the consortium’s energy interests based in Geneva and Stockholm.
In Canada, the group controls large positions in Lundin Mining, uranium producer Denison Mines and Lundin Gold.
The family also has a large stake in northern Alberta heavy oil producer Black Pearl resources.
The new iteration of IPC was created to takeover Lundin Petroluem’s operations in France, the Netherlands and Malaysia, while “Lundin” continues on managing the sizable Norwegian unit.
“The (IPC) assets amounted to 10 per cent of the production and five per cent of the lands, and they really weren’t getting the attention they deserved,” said Nicholson.
He sees Suffield in the same category. Cenovus halted most new work on the base since 2014. Nicholson says targeted drilling and new capital will boost production and an already sound profit margin.
He also points to Canada’s stability and low tax rate compared to Scandinavia and developing countries as major points of attraction to the Cenovus deal.