Swedish energy company Lundin Petroleum has announced plans to spin-off its assets in Malaysia, France and the Netherlands into a newly set up company International Petroleum (IPC).

The proposed spin-off is a result of a review conducted by the company to assess strategic alternatives to improve the business.

As part of the review, Lundin concluded the IPC assets would benefit from strategic flexibility and management focus.

Lundin Petroleum Board chairman Ian H. Lundin said: “The spin-off of our international assets into IPC creates an exciting new company with a strong balance sheet and a proven Board and management team.

"Their focus will be to create value at a time in the cycle when the industry remains under-capitalised and multiple opportunities are available as companies rationalise their portfolios.

“With the spin-off, Lundin Petroleum will become fully focused on Norway, which I am convinced will serve to further crystallise the value of our high-growth asset portfolio in the North Sea and the southern Barents Sea.”

Since entering the Norwegian market in 2004, it has experienced continuous growth in size and value. Norwegian assets now account for 96% of Lundin Petroleum’s reserves and 88% percent of Lundin Petroleum’s 2017 production guidance.

Lundin Petroleum’s strong liquidity position of $1bn of headroom coupled with its operating cashflow generation is expected to allow the company to retain all external bank debt and still be able to fully fund its committed capital expenditure up to Johan Sverdrup first oil in late 2019. The Company’s net debt at year end 2016 amounted to approximately $4bn.