“Wintershall Dea” is one of the largest independent oil and natural gas companies in Europe, 72.7% of whose shares belong to the German group of companies BASF, and a part also to the investment company “LetterOne”, partially owned by Latvian citizen Pēteris Aven.
Britain’s biggest North Sea oil and gas producer Harbor Energy is seeking to expand outside the UK after the government imposed a windfall tax on the industry in 2022 following a spike in energy prices, Reuters writes.
According to Harbor CEO Linda Cook, the company will continue to expand over time. “Scale is becoming increasingly important in our industry. Not only to ensure relevance in the eyes of investors, but also to ensure access to various sources of cheap capital.”
The agreement between BASF, LetterOne and Harbor Energy provides for Wintershall Dea’s mining and development assets, exploration rights in Norway, Argentina, Germany, Mexico, Algeria, Libya, Egypt and Denmark, as well as Wintershall Dea’s carbon capture and storage ( CCS) license transfer to “Harbour”. The agreed value of Wintershall Dea’s assets is $11.2 billion. This amount also includes Wintershall Dea’s outstanding bonds, which have a face value of about $4.9 billion.
Aven will become a shareholder of the second largest British oil company
Upon completion of the transaction, BASF will own 46.5% of Harbor and will have the right to nominate two non-executive directors to Harbor’s board. This share could be reduced to 39.6% if investment company LetterOne, which is also partly owned by Peter Aven, which is also subject to British sanctions, converts about 251.5 million non-voting shares of Harbor into ordinary shares.
In that case, LetterOne would become a 14.9% shareholder of Harbour. Wintershall Dea’s existing shareholders, BASF and LetterOne, are expected to receive USD 2.15 billion in consideration and new shares issued by Harbour, representing 54.5% of the enlarged total shares of Harbour, following the closing of the deal. However, BASF CFO Dirk Elvermann has said that the company will gradually withdraw from the oil and gas industry over time.
Until the deal is closed, Wintershall Dea and Harbor will continue to operate as independent companies. The closing of the transaction is planned for the fourth quarter of 2024, however, its completion is dependent on, among other things, the approvals of the merger control and foreign investment authorities of several countries.
According to coatingsworld, in total, in the first half of 2023, the production volume of “Harbor” and “Wintershall Dea” reached 513 thousand barrels of oil equivalent per day. Pro-forma 2022 revenue of the combined companies was $13.5 billion and EBITDA was $10.3 billion. In 2022, the production volumes of “Harbor” and “Wintershall Dea” reached a total of 526 thousand barrels of oil equivalent per day.
Wintershall Dea is also continuing preparations to sell its stake separately to WIGA Transport Beteiligungs-GmbH&Co. WIGA operates in the German gas transport sector and is a joint venture between Wintershall Dea (50.02%) and SEFE Securing Energy for Europe GmbH (49.98%). WIGA’s independently operating subsidiaries operate high-pressure pipeline networks, including the GASCADE transport network, as well as OPAL and NEL.
Coatingsworld, on the other hand, points out that along with the transaction with “Harbour” the legal separation of the business of “Wintershall Dea” related to Russia is also taking place. BASF and LetterOne will remain the owners of the Russian-linked companies, which have been granted substantial German federal investment guarantees.
Putin confiscates Aven’s assets in Russia
Russia-related business includes participation in joint ventures in Russia, participation in Wintershall AG in Libya (51%), Wintershall Noordzee BV in the Netherlands (50%), as well as participation in Nord Stream AG (15.5%). Meanwhile, as reported by Reuters on December 20 of last year, Vladimir Putin ordered the withdrawal of multibillion-dollar stakes from Wintershall Dea and OMV in gas production projects in the Russian Arctic – the Yuzhno-Russkoye field and the Achimov projects and given to newly established Russian companies.
As a Wintershall representative told Reuters: “The presidential decree is another confirmation: Russia is no longer a reliable economic partner and is unpredictable – in all respects.”
2024-01-23 09:29:16
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