BASF has completed an equal-valued asset swap with its long time trade partner Gazprom which sees it focus more on the production of gas and oil and exited the gas trading and storage sector.
Through the transaction, Wintershall, a 100% subsidiary of BASF, receives the economic equivalent of 25.01% of the blocks IV and V in the Achimov formation of the Urengoy natural gas and condensate field in Western Siberia. The two blocks will be jointly developed by Gazprom and Wintershall.
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 tonnes of condensate. This is equivalent to a total of 2.4 billion barrels of oil equivalent (boe). An annual plateau production of at least 8 billion cubic meters of natural gas is expected from the two blocks. Production is planned to start in 2018.
In return, Wintershall has transferred its share in the previously jointly operated natural gas trading and storage business to its long-term partner Gazprom. This includes the 50% participation in the gas trading companies WINGAS, WIEH (Wintershall Erdgas Handelshaus Berlin) and WIEE (Wintershall Erdgas Handelshaus Zug) including shares in astora, which operates the natural gas storage facilities in Rehden and Jemgum, Germany, as well as a share in the natural gas storage in Haidach, Austria.
Gazprom also received 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 (the Netherlands, the UK and Denmark). Together these activities contributed about €12.2bn to sales and around €260m to EBITDA of BASF Group in 2014 and about €7.2bn to sales and around €240m to EBITDA of BASF Group in the first half of 2015. The successful partnership with Gazprom in the area of gas transportation activities will continue.
Following the closing of the transaction, Dr. Gerhard König has left the Board of Executive Directors of Wintershall Holding GmbH and has transferred to Gazprom Group in his function as Chairman of WINGAS.