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14.11.2012 11:57

BASF and Gazprom Agree on Asset Swap

Gazprom would obtain full control over several gas transmission companies and storage facilities in Germany and Austria

AUTHOR: publics.bg

© Gazprom

Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE, and Alexej Miller, Chairman of the Management Committee of OAO Gazprom, today (November 14, 2012) signed a legally binding basic agreement to swap assets of equivalent value.

Through the swap, BASF aims to further expand its production of oil and gas and to exit the gas trading and storage business. Subject to the approval by the relevant authorities, the transaction is to be completed by the end of 2013 and financially retroactive to April 1, 2013.

Through the agreement, two additional blocks of the Achimov formation of the Urengoi natural gas and condensate field in western Siberia will be jointly developed.

Wintershall, a 100% subsidiary of BASF, will receive 25% plus one share of the blocks IV and V in the Achimov formation together with the option to increase the share in the two gas and condensate deposits to 50%. According to the development plan confirmed by the Russian mining authority, blocks IV and V have total hydrocarbon resources of 274 billion cubic meters of natural gas and 74 million metric tons of condensate. This is equivalent to a total of 2.4 billion barrel of oil equivalent. A total annual plateau production of at least 8 billion cubic meters of natural gas is expected from the two blocks. Start of production is planned for 2016.

In return, Wintershall will completely transfer the currently jointly operated natural gas trading and storage business to its long-term partner Gazprom. This includes the 50% shares in the gas trading companies WINGAS, WIEH (Wintershall Erdgashandelshaus Berlin) and WIEE (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 (Netherlands, UK and Denmark). Together the activities to be divested contributed EUR 8.6 billion to sales and EUR 350 million to income from operations (EBIT) of the BASF Group in 2011. The partnership in the area of the construction, operation and marketing of natural gas pipelines will continue unchanged.