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    Wintershall Confident of DEA Takeover Approval

Summary

CEO Mehren said the deal would bolster competition in Norway.

by: William Powell

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Natural Gas & LNG News, Europe, Corporate, Mergers & Acquisitions, Exploration & Production, News By Country, Germany, Norway

Wintershall Confident of DEA Takeover Approval

Wintershall CEO Mario Mehren is confident of approval to merge with Russian-owned upstream firm DEA, having had positive signs since the deal was announced.

He told the Norwegian prime minister Erna Solberg at a meeting in Berlin October 16: "It has become clear during the last few weeks that Wintershall and DEA will become the company Wintershall DEA within the next year. As Europe's leading independent gas and oil producer, we will continue to expand our activities in Norway."

He added: "More competition is good for the Norwegian shelf. As Wintershall DEA, we will be one of the driving forces." Solberg was meeting German energy officials and industry executives at the Norwegian embassy. 

Austrian producer OMV in contrast did not in the end complete a swap of upstream assets in Norway for Gazprom's assets in Russia, as the Norwegian energy minister insisted that Norway should represent an alternative to Russian gas in Europe.  Early this month OMV announced it had settled for an outright purchase of Russian gas fields instead.

Wintershall DEA plans to increase its daily worldwide production from the current total of around 575,000 barrels of oil equivalent/day to 800,000 boe/d over the next three to five years, of which about a quarter will come from Norway. "In particular our successful exploration activities are making an essential contribution to this. The recoverable reserves from our Nova field are expected to be around 80mn boe, while Dvalin (DEA) is estimated to be 115mn boe. By way of comparison, the average discovery size in Norway has been around 44mn boe in recent years," he said. Once they start production, mainly crude oil will be produced in the Nova field and mainly natural gas in the Dvalin field.

“Norway offers a stable regulatory framework and is an ideal environment for gas and oil industry investments in the search for new discoveries. Of course, this greatly boosts our exploration activities," Mehren said. Equinor's Aasta Hansteen field, in which Wintershall has a 24% stake, is scheduled to start production soon and will also contribute to Wintershall’s further growth. "Europe's energy supply is thus secured in the long term – thanks to gas and oil from our partner country Norway," said Mehren.

Wintershall, the upstream subsidiary of chemicals giant BASF, is also backing Russian gas, and financing a tenth of the cost of the wholly Gazprom-owned 55bn m³/yr Nord Stream 2 gas pipeline, which is expected to start flowing gas late next year. All the gas trading activities formerly owned by Wingas, the joint venture with Gazprom, have been in Gazprom's hands since October 2015.