Wintershall and Statoil agree on asset swapCompanies swap stakes in the North Sea oil and gas fields Brage, Vega, Gjøa and Edvard Grieg. Wintershall substantially expands production in Norway.
Stavanger / Kassel. Wintershall is substantially expanding its production and reserves of oil and gas in the North Sea. Through an asset swap, Germany’s largest internationally active crude oil and natural gas producer will receive from the Norwegian Statoil ASA shares in the three producing fields Brage (32.7 percent), Gjøa (15 percent) and Vega (30 percent), containing reserves (2P) of around 100 million barrels of oil equivalent (boe). In addition, it is the joint intention of the parties that Wintershall takes over the operatorship of Brage, its first large production platform offshore Norway, subject to the agreement of the authorities and partners. A respective agreement was signed today, October 22nd 2012, by Statoil and Wintershall in Stavanger, Norway.
Through the transaction, Wintershall Norge will raise its daily production from currently around 3,000 boe to almost 40,000 boe per day next year through this transaction. In return, Statoil will receive a 15 percent share in the development project Edvard Grieg from Wintershall and financial compensation of US$1.35 billion. An additional payment of up to 100 million US$ will be paid contingent on the successful future development of the Vega field.
As part of the cooperation, the companies are examining the offshore application of the innovative technology “Schizophyllan” being developed by Wintershall and its parent company BASF to increase production from oil fields (EOR). The partners also agreed to conduct research together into unconventional resources such as shale gas and oil.
“Through this cooperation with Statoil, we are moving a big step forward in realizing our growth strategy and expanding our activities right at the source. This enables us to become one of the leading producers in Norway and balance our global portfolio even more effectively,” said Rainer Seele, Chairman of the Board of Executive Directors of Wintershall.
“The Norwegian continental shelf is a world class oil and gas region. Statoil is the largest operator with 48 developed fields and a strong exploration portfolio. We have made four major discoveries on the NCS over the past 19 months, and we continue to increase the oil recovery from mature fields. Today’s transaction frees up resources for Statoil to continue driving high value growth. We are also pleased to enter a strategic partnership with Wintershall to develop new insights and technologies for increased value creation,” said Helge Lund, President and CEO of Statoil.
“With our ambition to become the new operator of Brage, we are making headway in expanding Wintershall-operated production in Norway. We want to be active on the shelf in the long-term, establish ourselves as a partner – and take on responsibility,” explained Seele. In particular, this includes progressing development of Wintershall’s promising discoveries such as “Maria” and “Skarfjell” into production. “We want to create added value – for example by applying Schizophyllan, and through cooperation with Statoil, the largest Norwegian E&P company”, the Wintershall CEO explained.
Significant expansion of Norwegian activities
Wintershall already operates 25 platforms in the southern North Sea (the Netherlands, UK, Germany). “Brage would be our first producing operatorship in Norway and play an important role in our growth story,” Bernd Schrimpf, Managing Director of Wintershall Norge, added. Wintershall has positioned itself successfully in Norway as an integrated exploration and production company following the acquisition of Revus Energy in 2008. With more than 40 licenses – around half of these as operator – the company is already one of the largest license holders in Norway. “We also accomplished major successes in exploration recently, for example the discovery Maria, and, recently, Skarfjell,” Schrimpf explained: “Wintershall focuses on the entire E&P life cycle. We believe in the potential of the Norwegian Continental Shelf. We want to invest here in the long-term, and we also want to become active in the long-term as an operator.”
Brage is an established field east of Oseberg in the northern section of the North Sea and has been in production since 1993. Gjøa lies in the northern part of the North Sea. Vega is connected to Gjøa as a subsea tie-back. The Edvard Grieg field in the North Sea is scheduled to go into production in the fourth quarter of 2015. The Norwegian authorities have already approved the development plan.
Research into Enhanced Oil Recovery (EOR) offshore
“Through the planned cooperation with Statoil, Wintershall is also playing its part in extending the lifetime of producing reservoirs and increasing the field recovery rate, a strategic goal of Statoil and the Norwegian government,” said Martin Bachmann, member of the Board of Executive Directors of Wintershall and responsible for exploration and production. Wintershall has decades of experience in techniques for enhanced oil recovery. Together with its parent company BASF, the world’s largest chemical company, Wintershall is currently developing a new, environmentally friendly technology to improve the recovery rate from certain oil reservoirs: the biopolymer Schizophyllan, which is produced by a fungus. The gelatin-like substance thickens the water that is injected into the deposit to enhance oil production. Wintershall is in the process of starting an onshore field test of this innovative technology in northern Germany. “We will together make use of the insight we gain and further develop its application, for example offshore in the North Sea,” Bachmann said. Furthermore, with its environmental credentials, this organic product can also be used offshore in sensitive eco-systems to raise the recovery rate from crude oil reservoirs.
In addition, the parties have agreed to cooperate in research on unconventional hydrocarbon deposits in Germany and internationally. As part of this cooperation, Statoil is to receive a 49 percent share in the Wintershall concessions “Rhineland” and “Ruhr” in Germany. Statoil already has extensive experience in producing shale gas and shares with Wintershall a drive for exemplary standards in environmental protection and safety.
Overview of the transaction1:
Asset Status Equity acquired Wintershall total Operator
equity after deal
Brage in production +32.7% 32.7% Statoil
Gjøa in production +15% 15% GdF Suez
Vega in production +30% 30% Statoil
Edvard development -15% 15% Lundin
1 The transaction will be effective - subject to the approval of the authorities - on
January 1, 2013.
2 Subject to the agreement of the authorities and partners
Forward-looking statements and forecasts
This report contains forward-looking statements based on current expectations, assumptions and forecasts by the Board of Executive Directors, as well as on the information currently available to that board. Forward-looking statements are not deemed to be guarantees of the future developments and results set out therein. Future developments and results are in fact dependent on a large number of factors; they contain different risks and imponderables and are based on assumptions that may not be accurate. We do not assume any obligation to update the forward-looking statements made in this document.
Wintershall Holding GmbH, based in Kassel, Germany, is a wholly-owned subsidiary of BASF in Ludwigshafen. The company has been active in the exploration and production of crude oil and natural gas for over 80 years. Wintershall focuses on selected core regions, where the company has built up a high level of regional and technological expertise. These are Europe, North Africa, South America, as well as Russia and the Caspian Sea region. In addition, these operations are complemented by the company’s growing exploration activities in the Arabian Gulf. Today, the company employs more than 2,000 staff worldwide from 40 nations and is now Germany’s largest crude oil and natural gas producer. With the natural gas trading and transport subsidiaries it operates together with Russia’s Gazprom, the BASF subsidiary is also an important gas supplier on the German and European market.
Wintershall Norge AS is one of the largest license holders in Norway with over 40 licenses and more than 20 operatorships. In 2011 the company invested about half of its global exploration budget in the Norwegian Continental Shelf. Wintershall is planning to invest up to €2 billion in exploration and development in Norway and the UK by the end of 2015. The company plans to raise daily production more than ten-fold to 50,000 barrels of oil equivalent by 2015. The fields Knarr, Edvard Grieg and Cladhan are expected to contribute to this production target. The company is based in Stavanger and now employs more than 200 staff.
Equinor Energy AS is an international energy company with operations in 36 countries. Building on 40 years of experience from oil and gas production on the Norwegian continental shelf, Equinor is committed to accommodating the world's energy needs in a responsible manner, applying technology and creating innovative business solutions. The company is headquartered in Norway with approx. 21,000 employees worldwide, and is listed on the New York and Oslo stock exchanges.
Wintershall. Shaping the Future.
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