Annual Report 2009

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CORPORATE GOVERNANCE REPORT Main external rules & regulations affecting Lundin Petroleum’s corporate governance: LUNDIN PETROLEUM – GOVERNANCE STRUCTURE » Swedish Companies Act » Swedish Annual Accounts Act » The NASDAQ OMX Stockholm Rule Book for Issuers The Nomination Committee Shareholders through AGM’s and EGM’s » Swedish Code of Corporate Governance Main internal rules & regulations affecting Lundin Petroleum’s corporate governance: The Auditor The Audit Committee The Board of Directors Internal Control The Compensation Committee » The Articles of Association » The Rules of Procedure of the Board, instructions to the CEO and for the financial reporting and the terms of reference of Board Committees » The Code of Conduct » Policies, Guidelines & Procedures » The Green Book management system The President & CEO The Management Investment Committee Group Management GUIDING PRINCIPLES OF CORPORATE GOVERNANCE AND APPLICABLE RULES AND REGULATIONS Since its creation, Lundin Petroleum has been guided by general principles of corporate governance to: » Protect shareholder rights » Provide a safe and rewarding working environment to all employees » Abide by applicable laws and best industry practice » Carry out its activities competently and sustainably » Sustain the well-being of local communities in its areas of operations Lundin Petroleum adheres to principles of corporate governance found in both internal and external rules and regulations. As a Swedish public limited company listed on the NASDAQ OMX Stockholm, Lundin Petroleum is subject to the Companies Act (SFS 2005:551) and the Annual Accounts Act (1995:1554), as well as the Rule Book of Issuers of the NASDAQ OMX Stockholm (which rules can be found on the website www.nasdaqomx.com). This Corporate Governance Report has not been subject to an audit by the Company’s auditors. In addition, the Company abides by principles of corporate governance found in a number of documents as described here below. Code, adapted to new EU and Swedish regulations, entered into force on 1 February 2010. Certain rules regarding remuneration and independence of directors, as well as audit committees, will become applicable in stages during the course of 2010. The Code is based on the “comply or explain principle”, which entails that a company may choose to apply another solution than the one provided by the Code if it finds a Code rule inappropriate in a particular case. The company must however explain why it did not comply with the rule in question and describe the company’s preferred solution, as well as the reasons for it. Lundin Petroleum complied in all major aspects with the Code in 2009, other than certain instances in which the Company did not strictly adhere to the terms of the Code. Firstly, since the Chief Executive Officer (the “CEO”) does not speak fluent Swedish, his presentation during the 2009 Annual General Meeting (the “AGM”) was delivered in English, and not in Swedish as the Code requires. However, Swedish subtitles were provided concurrently on the overhead slides. Secondly, a Board member serves as the Chairman of the Nomination Committee for the 2010 AGM and, due to developments during the year, he is no longer deemed to be independent of the Company’s major shareholders. The Nomination Committee however unanimously decided that he was the best candidate to carry out the task. Lundin Petroleum further conducts its activities in accordance with the Code rules applicable at the time, and will therefore apply the new rules introduced in 2010 as of when such new rules enter into force. The Swedish Code of Corporate Governance The Swedish Code of Corporate Governance (the “Code”) is based on the tradition of self-regulation and acts as a complement to the corporate governance rules contained in the Swedish Companies Act, the Annual Accounts Act and other regulations such as the Rule Book for Issuers and good stock market practice. The Code first entered into force on 1 July 2005 and has since its introduction been subject to two major revisions. The first revised Code entered into force on 1 July 2008 and the second revised Lundin Petroleum’s Articles of Association Lundin Petroleum’s Articles of Association form the basis of the governance of the Company’s operations. The Articles of Association set forth the Company’s name, the seat of the Board, the object of the business activities, the shares and share capital 30 Lundin Petroleum ANNUAL REPORT 2009

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