Statoil sells North Sea assets to Austria's OMV for $2.65 bn

Norwegian oil and gas giant Statoil ASA has agreed to sell its minority interests in four North Sea assets to Austrian rival OMV for approximately $2.65 billion in cash, as part of the company's strategy of shedding non-core assets and unlock capital for investing in growth projects.

The sale includes Statoil's interests in Gullfaks and Gudrun fields offshore Norway operated by Statoil, and stakes in non-operated Schiehallion and Rosebank fields, west of Shetlands.

Further to the transaction, Statoil's stake in Gullfaks will get reduced to 51 per cent from 70 per cent, and in Gudrun it will be cut to 51 per cent from 75 per cent.

Statoil will exit the Schiehallion field operated by BP by divesting its 5.9-per cent stake and Chevron's Rosebank field by selling its 30-per cent interest. OMV is already a partner in Schiehallion and Rosebank with stakes of 5.9 per cent and 20 per cent respectively.

Statoil's president and chief executive Helge Lund said, ''Through this transaction, Statoil captures value created through asset development and unlocks capital for investment in high return projects in core areas. This includes our recent discoveries on the Norwegian continental shelf.''

The companies will also enter into a partnership for cooperation in oil and gas exploration across the Norwegian and UK continental shelves and the Faroese Islands as well as development of enhanced oil recovery technologies.

For the Vienna-based OMV, the deal provides opportunity to enter in one of Norway's new developments and underlines increasing investments in the North Sea driven by new discoveries and higher oil prices.

"Statoil is pleased to strengthen the partnership with OMV on the Norwegian Continental shelf. OMV is already a valued partner in Edvard Grieg and Aasta Hansteen, and this agreement enables our companies to develop the cooperation further," Lund said.

"I believe this is a win-win deal for Statoil and OMV. Apart from the assets, I am especially proud that we can partner with a world-class leader in offshore and enhanced oil recovery technology", said Gerhard Roiss, chief executive officer of OMV.

Stavanger-based Statoil is an energy company which has operations in 34 countries across the globe.

The company produced a little over 2 million barrels of oil equivalent (mboe) per day in 2012 and has kept a target of over 2.5 mboe per day in 2020. Its 2012 revenue was €122 billion.

According to some analysts, the sale price is very good. Statoil's market capitalisation is around two times the company's book value, while the stock trades at around 1.3 times its book value.

Through the deal, Statoil expects to raise about $1.3-1.5 billion between 1 January 2013 and the closing date.

The transaction will enable Statoil to redeploy around $7 billion of capital, around $5.5 billion of which is pre-2020, Statoil said.

In the past 3 years, Statoil has divested assets worth $15 billion, enabling the company to redeploy the resources to core, high- return upstream projects.

In the Gullfaks field, Statoil has made a new discovery in the Shetland/Lista formation. Gudrun is on track for production start-up in the first quarter of 2014.

In the first half of the year, Statoil produced approximately 26,000 boe per day from Gullfaks. The company expects a production impact of around 40,000 boe per day in 2014 and 60 boe per day in 2016 as a result of the transaction.

Vienna-based OMV is Austria's largest listed company with its core oil production fields in Austria and Romania. Its portfolio also includes assets in North Africa, the Middle East, and the North Sea.

The company produces around 303,000 boe per day and possesses annual refining capacity of 22 million and 4,400 filling stations. In 2012, OMV reported revenue of $57 billion.

The transaction, which is effective on 1 January, is expected to close by the end of the year subject to customary closing conditions and regulatory approvals.

Bank of America Merrill Lynch and Lambert Energy Advisory Ltd acted as financial advisors to Statoil on the deal.