New Norwegian energy major emerges

Deal creating Aker BP closes Friday, one of the acquisition targets announced.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Sept. 30, 2016 at 7:58 AM
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TRONDHEIM, Norway, Sept. 30 (UPI) -- A company that moves under the umbrella of British energy company BP said a merger that creates a new Norwegian energy major closed as of Friday.

A Norwegian subsidiary of BP and Norwegian energy company Det norske unveiled plans in June to create Aker BP, an independent company they said will be the largest Norwegian independent oil and gas producer. Norwegian oilfield services company Aker, which owns 49.9 percent of Det norske, is included in the arrangement.

"The closing of the transaction is scheduled to take place today," Det norske said in a statement. "On the closing date, the company will change its name to Aker BP."

Wading into the waters of Norway gives BP a foothold in the giant Johan Sverdrup oil field, where Det norske has a minority interest.

The first phase of operations at Johan Sverdrup should yield up to 380,000 barrels of oil per day, roughly half of the expected peak production rate. Once in full swing, the field, the fifth largest discovered off the Norwegian coast, should account for up to 25 percent of all Norwegian petroleum production.

Excluding the merger, Det norske said earlier this month it was expecting production to increase by as much as 18 percent because of higher-than-anticipated output from some of its key holdings. Costs associated with that production, meanwhile, are expected to go down by as much as 20 percent

No changes were made to capital spending plans by Det norske.

The Norwegian energy sector is dominated by Statoil, one of the largest suppliers of oil and natural gas to the region. The Norwegian government controls about two-thirds of the shares in Statoil.

The companies behind the merger creating Aker BP said the combined "new Norwegian super-independent" company could build a production capacity of more than 250,000 barrels of oil equivalent per day by the early part of the next decade.

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