BASF to accelerate upstream business with Wintershall
BASF‘s oil and gas subsidiary Wintershall from Germany and Statoil from Norway signed an agreement to swap strategic assets in the North Sea and establish a cooperation framework on the enhanced oil recovery (EOR) technologies.
Home-based in Kassel, Germany, Wintershall is a BASF wholly-owned company operating upstream and midstream in the oil and natural gas trading, transportation and distribution in Germany.
According to this agreement, Wintershall will receive from Statoil shares in three fields located in the Norwegian Continental Shelf (NCS):
– Brage 32.7%
– Gjoa 15%
– Vega 30%
These fields contain still approximately 100 million barrels of oil equivalent (boe) of proven and probable reserves (2p).
With the acquisition of these working interests in these oil and gas offshore fields, Wintershall will become the operator of the Brage field.
So far Wintershall had mostly minority stakes in different oil and gas fields in the North Sea, but Brage will be the first large offshore platform in the Norwegian North Sea operated by Wintershall.
As a result Wintershall oil and gas production in Norway will jump from the actual 3,000 boe/d to 40,000 boe/d.
In return Statoil will receive Wintershall’s 15% shares in the Edvard Grieg project, previously called Luno, and an additional compensation of $1.35 billion.
Statoil will also receive $100 million more at the completion of the current Vega project development.
Beyond the financial aspects of this swap of assets, the addition of the Edvard Gried field to Statoil‘s portfolio will increase the synergies with the development of the near-by giant Johan Sverdrup project and related complex Utsira High subsea electrification program.
Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE. commented this swap of assets its oil and gas subsidiary Wintershall in this way:
“Through the cooperation with Statoil, we are taking a big step forward in realizing our growth strategy in Oil & Gas and expanding our activities at the source. This enables Wintershall to become one of the leading producers in Norway and balances its global portfolio even more effectively,”
BASF, Wintershall and Statoil to innovate in EOR
This statement confirmsenhanced oil recovery (EOR) move to become a key player in the oil and gas market and especially in its upstream side of the exploration and production.
This BASF strategic evolution may find some explanations in the second aspect of the agreement signed between Wintershall and Statoil related to the enhanced oil recovery (EOR) techniques.
Earlier this year Statoil had announced to have reached for the first time 50% oil recovery in its North Sea operations and set a new goal at 60% supported by intensive research and development capital expenditure.
On their side BASF and Wintershall developed a bio-technology based on Schizophyllan fungus to increase the performances of the conventional enhanced oil recovery (EOR) solutions.
This BASF and Wintershall innovation has been tested in Germany in Wintershall’s Rheinland and Ruhr onshore fields.
As part of the deal, Statoil will take 49% share in the Rheinland and Ruhr fields, while Wintershall’s operatorship in Brage will provide them with the opportunity to test “Schyzophillan” offshore.
If proven to work, the consequence of this innovation could be significant for Statoil and Wintershall in the North Sea but also for BASF to open in the oil and gas exploration and production market a fantastic opportunity to expand its global market leadership in chemicals.
