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Wintershall Norge

Wintershall Worldwide
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15.12.2017

“Will become one of the most important oil companies in Europe”Wintershall’s CEO Mario Mehren believes that the Norwegian shelf will be extremely important for the planned merger with DEA.

Sysla Offshore, Stavanger Aftenblad, published 14th Dec., 2017, by Ola Myrset.

“The reactions are extremely positive. People can see the opportunities this presents”.

Wintershall’s CEO Mario Mehren has just come out of a general meeting with the company’s 500 employees in Norway.

Facts

Wintershall

  • German oil company with head office in Kassel
  • Owned by the chemicals giant BASF
  • Established on the Norwegian shelf since 2006
  • 500 employees in Norway
  • Operator of the Brage and Vega fields, which are in production
  • Also operator of the Maria and Skarfjell projects

DEA

  • German oil company with head office in Hamburg
  • Owned by the investment fund LetterOne
  • Has been active on the Norwegian shelf for more than 40 years
  • 150 employees in Norway, including contracted consultants
  • Is the operator of the Dvalin project, formerly Zidane, which is under development

Last Thursday it was announced that a letter of intent has been signed for the merger of the German oil companies Wintershall and DEA, and this week Mehren travelled from the company’s head office in Kassel to Stavanger to talk about the reasons behind the merger.

Investing in Norway

The new company will be called Wintershall DEA, and it has big ambitions.

“The aim of the merger is to become one of the most important oil and gas companies in Europe. My message to the employees concerns the period of growth that lies ahead of us”, Mehren told Sysla.

The CEO points out that the organisation in Norway knows what growth means. In 2006, the company opened its Norwegian division in Oslo with 12 employees and no production. Eleven years later, it employs around 500 people. The head office has been moved to Stavanger.

Daily production is around 80,000 barrels of oil equivalents, and the company is the operator of several fields in production and future projects on the Norwegian shelf.

“A merger would accelerate our growth. Our total production would be over 150,000 barrels per day in Norway, and with the projects that will soon be starting, like Aasta Hansteen, this would rise to around 200,000. That would make us one of the biggest players on the Norwegian shelf. Major segments of our investments will be coming here in the future”.

Globally, the total production of the two companies amounted to around 600,000 barrels per day in 2016, and a turnover of around NOK 42 billion at the current exchange rate.

No German giant

“The idea of bringing these companies together has been around for a long time. A merger will create a big, German oil company – which, unlike many other oil nations, we do not currently have. We also have a similar strategic thinking, and have portfolios which complement each other”, said Mehren.

He believes that there are also political benefits.

“The German oil industry is fragmented, without a common voice with which to speak to the rest of the world. There is no major company that can represent the common interests of the industry. At a time when there are many discussions about the future of the industry, it is important to be a certain size in order to be seen and heard.

“In many parts of the world, like the Middle East, North Africa and South America, German companies are also associated with reliability and technical expertise. That could help provide access to resources”, believes Mehren.

Continuing as CEO?

However, at the moment, this is nothing more than a signed letter of intent. In the next few months, the companies will be negotiating on final terms, and all the relevant authorities will have to approve the plans. The goal is for the merger to be completed in the second half of 2018.

This means that it is too early to say exactly what a merger will mean to the employees, and what the organisation will look like eventually.

However, it has already been decided that Wintershall’s owner BASF will appoint the new CEO, while DEA’s owner Letter One will choose the second in command.

“Will you also be CEO of the new company”?

“That is a good question, and a choice that the owners will have to make. I am sure that they will decide wisely” said Mehren with a smile.

Controversial

DEA is owned by the controversial Russian oligarch Mikhail Fridman through the company LetterOne.

The British authorities have refused to allow Fridman to own licences, due to Western sanctions against Russia, but he is having no such problems on the Norwegian shelf. Wintershall is currently active on the British shelf, and among other things is the operator of the Wingate gas field.

However, Mehren is not afraid that this will have any consequences for the new company.

“No, I am not concerned at all. We have good relations with all parties in the British oil industry. I regard LetterOne as a dedicated investor in oil and gas. DEA has grown under the current ownership, and I am sure that we will be able to continue to grow”, said Mehren.

“Has this been a topic in the negotiations”?

"No.

The merger is one of a number of such mergers in recent years.

“This is a good time to merge, because we are now on our way up from the bottom. There is also a general understanding that we have to operate efficiently. Now optimism is coming back, which means that it is a good time to create something new”, said Mehren.

Source: www.sysla.no

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