• Annual Report 2009
  • 4Letter to shareholders
  • 6Words from the Chairman
  • 8Our business, vision and strategy
  • 9Market overview
  • 12Operations
  • 13Reserves, resources and production
  • 16Core area - Europe
  • 21Core area - Russia
  • 22Core area - South East Asia
  • 23Other operations
  • 24Corporate responsibility
  • 30Corporate governance report
  • 36-Internal control and risk management
  • 38-Board of directors
  • 39-Management
  • 40-Risk factors
  • 41The share and shareholders
  • 44Five year financial summary
  • 45Director's report
  • 54Income statement
  • 55Comprehensive income
  • 56Balance sheet
  • 57Statement of cash flow
  • 58Statement of changes in equity
  • 59Key financial data
  • 60Accounting principles
  • 67Notes - Group
  • 84Parent company annual accounts
  • 88Notes - Parent company
  • 90Board assurance
  • 90Financial reporting dates
  • 91Auditor's report
  • 92Reserve quantity information
  • 93Definitions

Annual Report 2009

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WORDS FROM THE CHAIRMAN PRODUCTION PERFORMANCE boepd 40,000 30,000 20,000 10,000 0 01 02 03 04 05 06 07 08 09 Where we fit in Lundin Petroleum experienced a very active year in 2009, carrying out a large exploration drilling programme while managing producing assets and turning undeveloped reserves into production. The proven and probable reserves increased by 26 percent to 256 MMboe as production averaged 38,200 boepd, a 20 percent increase over 2008. Norway now accounts for more than half of our total prospective resources and will continue be at the forefront of the Company’s growth strategy. Norway’s stable tax regime and its fair treatment of foreign investors are two good reasons for us to be there, but as always it is the potential size of discoveries that drives us. Our significant investment in Russia suffered a big set back as a result of disappointing drilling results. However we strongly believe that the Morskaya discovery in the Lagansky block will yield a lot of oil one day. We are also very pleased to have Gunvor International as a partner in this venture which will certainly give a boost to the project. Our producing assets in United Kingdom, France, Netherlands, Tunisia and Indonesia continue to perform well. Exploration activity in South Asia is ramping up with two wells in Vietnam this year and a major drilling campaign commencing in Malaysia in 2011. We announced recently the spin-off of our United Kingdom assets into EnQuest, a new independent oil and gas company focused on the UK North Sea. The transaction will not only allow you, the shareholders, to participate in a new and exciting investment vehicle but will also crystallise the value of the UK assets. EnQuest which will be listed on both the Stockholm and London stock exchanges has a proven management team, strong cash flow and no long-term debt. The oil industry is often considered to be in its twilight and it is true that the average age of professionals in the business is increasing at an alarming rate. So while there is a prevailing view that fossil fuels will be phased out in the next few decades, energy dependence on these fuels is actually increasing. Responsible use of these resources is the duty of producers and consumers alike. Technological advances and efficient markets will make it easier to achieve economic goals while protecting the environment. Lundin Petroleum will do its part by developing and producing its oil and gas reserves in a sound and responsible manner. Finally I would like to thank all our employees for a job well done and you, our shareholders, for your continued support. Lundin Petroleum’s production history since its inception in 2001. Yours sincerely, Ian H. Lundin Chairman of the Board 7 LUNDIN PETROLEUM the world and controlling waste together with better use of resources is the most straightforward method to reduce greenhouse gas emissions. High energy prices may be the main motivating factor necessary to increase efficiency but Government legislation has its role to play. Perhaps most importantly gasoline subsidies in certain countries such as Russia, China, Venezuela and Iran have to be phased out. Subsidised energy prices encourage domestic consumption on a grand scale using up natural resources wastefully and reducing export revenues. Similar subsidies exist in the form of artificially low prices for electricity, coal and natural gas and have the same undesirable effects. Energy in any form is precious and the waste of energy will continue until it is recognised as such and not used as a political tool by Governments around the world.

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