GERMANY’S BASF and LetterOne have agreed to merge their oil and gas subsidiaries Wintershall and DEA as they seek to create a leading independent European oil and gas company.
The companies have signed a definitive transaction agreement to merge their businesses in a joint venture named Wintershall DEA. Last year, the companies signed a letter of intent to merge and had expected to complete the deal in the second of half of 2018, but this has now been pushed back to the first half of 2019.
In 2017, the companies had combined crude output of 575,000 bbl/d last year, and aim to lift this to 750,000-800,0000 bbl/d between 2021 and 2023.
DEA, which is headquartered in Hamburg, Germany, has production facilities and concessions in Algeria, Denmark, Egypt, Germany, Norway and Mexico. Wintershall is headquartered in Kassel, Germany, and focusses on exploration and production in Europe, Russia, South America, North Africa and the Middle East.
“With Wintershall DEA we create the leading independent European exploration and production company with international operations in core regions. By combining the two German-based entities, BASF and LetterOne lay the basis for further profitable growth,” said Hans-Ulrich Engel, CFO of BASF.
The companies expect their tie-up will produce €200m in annual operational cost savings. BASF will own 67% of the joint venture, and LetterOne 33%.
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