Ineos Energy to divest Norwegian subsidiary to PGNiG in $615m deal
Ineos Energy has signed a $615 million deal to divest its oil and gas business in Norway to PGNiG, a Polish state-controlled company.
The sale includes the stakes of Ineos Oil & Gas in production, fields, licences, facilities, and pipelines, offshore Norway.
The Norwegian subsidiary of Ineos Oil & Gas – Ineos E&P Norge has stakes in 22 licences on the Norwegian continental shelf. Out of these, half a dozen licences are operated by Ineos E&P Norge, which also holds an 8% stake in the Nyhamna Terminal.
Ineos E&P Norge’s production from the Norwegian Sea is around 33,000 barrel of oil equivalent (BOE) per day. It has a 93% gas ratio from three non-operated fields – Ormen Lange (14%), Alve (15%), and Marulk (30%).
Ineos Energy expects the sale of its Norwegian business to enable it in rebalancing its portfolio in terms of oil and gas while transitioning to a more operated position. The sale of the Norwegian oil and gas business follows Ineos Energy’s recently signed $150 million worth deal to acquire the Danish oil and gas assets of Hess Corporation.
Ineos to sell Norwegian oil and gas business – Ineos E&P Norge to PGNiG for $615m. Photo courtesy of INEOS.
Brian Gilvary- Executive Chairman of INEOS Energy said: “This represents another positive step in the INEOS Energy journey. The deal allows us to monetise a non-operated, predominantly gas portfolio at an attractive price compared to our hold value.
“This will further balance our portfolio of oil and gas and open up new opportunities to reinvest further into the energy transition. These assets are a very strong strategic fit for PGNiG and significantly extends their position in Norway.”
PGNiG, which is executing the deal through PGNiG Upstream Norway, expects to achieve annual gas production of four billion cubic metres in 2027 from its Norwegian assets.
The Polish state-controlled oil and gas company will be gaining an additional 117 million barrels of oil equivalent by acquiring Ineos E&P Norge, thereby growing its Norwegian resources by approximately 55%.
Its Norwegian subsidiary has stakes in 36 licences and has production of oil and gas from nine fields. The company is also involved in the development of another six fields in Norway.
Paweł Majewski – President of the PGNiG Management Board said: “The transaction is of particular importance to PGNiG. Acquisition of the INEOS E&P Norge AS assets means a sharp increase in our gas output in Norway, and will ensure considerable gas volumes for the Baltic Pipe. Therefore, it will contribute significantly to the implementation of the PGNiG Group’s strategic objectives,” said
“Our activities in Norway are closely linked to Poland’s energy security. Starting from 2022, gas from the Norwegian fields will be transported to Poland through the Baltic Pipe.
“This will result in a greater diversification of the sources of gas imports, which is a guarantee of uninterrupted supplies of the fuel whose role in Poland’s economy is constantly growing. For PGNiG, diversification of the gas portfolio means more flexibility and the ability to offer attractive commercial terms to our customers.”
Subject to respective corporate and administrative approvals, the deal is anticipated to be wrapped up later this year.