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BASF, Gazprom to Swap O&G Assets With Billions in Sales

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German chemical company BASF SE said Wednesday it has agreed with Russia's Gazprom OAO on an asset swap that will see BASF exiting activities which had 8.6 billion euros ($10.9 billion) in sales last year.

MAIN FACTS:

  • BASF will increase oil and gas production and exit the gas trading and storage business.
  • BASF and Gazprom Chief Executives Kurt Bock and Alexej Miller signed a legally binding basic agreement to swap assets of equivalent value.
  • Two additional blocks of the Achimov formation of the Urengoi natural gas and condensate field in western Siberia will be jointly developed.
  • BASF subsidiary Wintershall will receive 25% plus one share of the blocks IV and V in the formation with the option to increase the share in the deposits to 50%.
  • The two blocks have total resources of 274 billion cubic meters of natural gas and 74 million metric tons of condensate, equivalent to a total of 2.4 billion barrels of oil.
  • In return, Wintershall will completely transfer the jointly operated natural gas trading and storage business to Gazprom. This includes the 50% shares in the gas trading companies Wingas, Wintershall Erdgashandelshaus Berlin and Wintershall Erdgashandelshaus Zug including shares in the natural gas storage facilities in Rehden and Jemgum, Germany, as well as Haidach, Austria, and the gas storage operator Astora.
  • Gazprom will also receive a 50% share in the activities of Wintershall Noordzee B.V., which is active in the exploration and production of oil and gas in the southern North Sea.
  • Together the activities to be divested contributed EUR350 million to income before interest and tax of BASF in 2011.

Copyright (c) 2012 Dow Jones & Company, Inc.

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