Bil­lion­aire bros. be­hind Suffield block buy

Medicine Hat News - - FRONT PAGE - COLLIN GAL­LANT

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.

PHOTO COUR­TESY THE NORTH­ERN MINER

Lukas Lundin, one half of the bil­lion­aire broth­ers who op­er­ate the Lundin Group, the par­ent com­pany of In­ter­na­tional Petroleum Corp, which just bought 900,000 acres of Suffield oil and gas leases from Cen­ovus.

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