BASF, Gazprom agree asset swap

BASF, Gazprom agree on asset swap

4:23 AM, 15th November 2012
BASF, Gazprom agree on asset swap
Dr Kurt Bock, Chairman, Board of Executive Directors, BASF.

LUDWIGSHAFEN, GERMANY: BASF and OAO Gazprom signed a binding basic agreement to swap assets of equivalent value. 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 1 April 2013.

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 per cent subsidiary of BASF, will receive 25 per cent 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 per cent.

Wintershall will completely transfer the currently jointly operated natural gas trading and storage business to its long-term partner Gazprom. Together the activities to be divested contributed €8.6 billion to sales and €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.

“The asset swap is consistent with our strategy to expand the exploration and production of crude oil and natural gas through organic growth and targeted acquisitions. With this step, we are further developing our more than 20 year partnership, Gazprom will become more active in the natural gas trading and storage business and we will jointly expand the production at the source,” said Dr Kurt Bock, Chairman, Board of Executive Directors, BASF.

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