Annual Report 2010

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CORPORATE GOVERNANCE REPORT 2010 INTRODUCTION - GOVERNANCE STRUCTURE The object of Lundin Petroleum’s business is to explore, develop and produce oil and gas and to develop other energy resources, as laid down in its Articles of Association. The Company aims to create value for its shareholders through exploration and organic growth. To achieve this value creation, Lundin Petroleum applies a governance structure that favours straightforward decision making processes, with easy access to the relevant decision makers, while nonetheless providing the necessary checks and balances for the control of the activities, both operationally and ﬁnancially. The governance structure of Lundin Petroleum can be summarised in the following chart and will be described in further detail in this corporate governance report. This corporate governance report has been subject to a review by the Company’s auditors. Lundin Petroleum - Governance Structure » The Shareholders’ Meeting is the highest decision-making body of » Nomination Committee Shareholders’ Meetings Lundin Petroleum where the shareholders exercise their voting rights to inﬂuence the operations of the Company. The shareholders appoint at each Annual General Meeting the members of the Board of Directors and the Chairman of the Board, further to proposals presented by the Nomination Committee. The shareholders appoint the external auditors of the Company, who report back to the shareholders on their ﬁndings in the audit process. » External Auditor Reserves Committee Board of Directors Compensation Committee Audit Committee » The Board of Directors appoints the President & Internal Audit President & CEO CEO of the Company, who is in charge of the day-to-day management of the operations, with the assistance of the other members of the Executive Management and Group management. » An Investment Committee has been established by the Board, consisting of the Executive Management of the Group, to assist the Board in speciﬁc investment related matters. Investment Committee/ Executive Management » The Board has established three committees, the Audit Committee, the Compensation Committee and the Reserves Committee, to oversee the Company’s ﬁnancial reporting and internal controls, to administer the Company’s management compensation program and to review the Company’s oil and gas reserves reporting. » The internal audit function is tasked with auditing and measuring the eﬀectiveness of the internal control and reports thereon to the Audit Committee. Other Executive Management (COO, CFO & SVP Operations) Other Group Management LUNDIN PETROLEUM’S GUIDING PRINCIPLES OF CORPORATE GOVERNANCE 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 Swedish Companies Act (SFS 2005:551) and the Annual Accounts Act (1995:1554), as well as the Rule Book for Issuers of the NASDAQ OMX Stockholm (which rules can be found on the website www.nasdaqomx.com). In addition, the Company abides by principles of corporate governance found in a number of internal and external documents. 41

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