Euroil: North Sea M&A heats up

Polish gas company PGNiG has continued its acquisition spree off Norway with its biggest purchase to date worth $615mn.

The state-owned firm has struck a deal to acquire the Norwegian business of UK group Ineos, which produces around 33,000 barrels of oil equivalent per day (boepd), including 1.5bn cubic metres per year of gas. The transaction covers 22 licences, including non-operated stakes in the Ormen Lange (14%), Alve (15%) and Marulk (30%) fields, as well as the Equinor-operated Nyhamna terminal, which handles gas en route to the UK and mainland Europe.

PGNiG President Pawel Majewski said the acquisition would provide a boost to Polish energy security, with the company on track to produce 4 bcm per year off Norway by 2027. The company is gathering resources to fill its Baltic Pipe project, which is due to pump up to 10 bcm per year of Norwegian gas to Denmark and Poland starting in 2022. The pipeline will help Poland ease its reliance on gas supplies from former communist master Russia, which Warsaw views as a national priority.

Ineos is meanwhile expanding in other areas. In January, it closed the $5bn acquisition of BP’s petrochemicals business, giving it greater global reach. It also agreed to buy the Danish arm of US oil firm Hess for $150mn in March.

The latest deal follows a number of North Sea M&A announcements this year, with recovering oil and gas prices and a clearer market outlook encouraging increased deal-making. The headline deal was ExxonMobil’s transfer of its UK North Sea business to private equity-backed NEO Energy for over $1bn, announced in February.

Also in Norway, HitecVision-backed Sval Energi last week wrapped up the $300mn purchase of the Norwegian business of Italy’s Edison.

The deal, with an effective date of January 1, 2020, gives Sval some 25mn barrels of oil equivalent (boe) in reserves. Specifically, the company has increased its position in the Wintershall Dea-managed Nova oilfield, slated to come on stream next year, from 10 to 25%. It has also secured a 10% stake in the German company’s Dvalin gas field. Dvalin had been expected online already, but Wintershall Dea had to postpone the launch after discovering in January that its gas contained large quantities of mercury.

Sval has also acquired shares in five exploration blocks.

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