Ineos Sells Norway Oil Business for $615MM

Ineos Energy has announced an agreement to sell its oil and gas business in Norway to PGNiG Upstream Norway AS for a consideration of $615 million. 

The deal includes all Ineos oil and gas interests in production, licenses, fields, facilities, and pipelines on the Norwegian continental shelf. The sale, which is expected to complete later this year, has an effective date of  January 1, 2021 and is subject to approval by the Norwegian Ministry of Petroleum and Energy and the Norwegian Ministry of Finance.

Under the agreement, all 52 employees of Ineos E&P Norge AS will transfer to PGNiG Upstream Norway AS following completion of the deal. Ineos E&P Norge AS produces around 33,000 barrels of oil equivalent per day from the Norwegian Sea, according to Ineos Energy, which noted that the deal continues to rebalance its portfolio in terms of oil and gas and moves Ineos Energy towards a more operated position.

“This represents another positive step in the Ineos Energy journey,” Brian Gilvary, the executive chairman of Ineos Energy, said in a company statement.

“The deal allows us to monetize a non-operated, predominantly gas portfolio at an attractive price compared to our hold value. This will further balance our portfolio of oil and gas and open up new opportunities to reinvest further into the energy transition,” he added. 

“These assets are a very strong strategic fit for PGNiG and significantly extends their position in Norway,” Gilvary continued.

Commenting on the deal, Pawel Majewski, the president of the PGNiG  Management Board, said, “the transaction is of particular importance to PGNiG”.

“Acquisition of the Ineos E&P Norge AS assets means a sharp increase in our gas output in Norway and will ensure considerable gas volumes for the Baltic Pipe. Therefore, it will contribute significantly to the implementation of the PGNiG Group's strategic objectives,” he added.

“Our activities in Norway are closely linked to Poland's energy security. Starting from 2022, gas from the Norwegian fields will be transported to Poland through the Baltic Pipe. This will result in a greater diversification of the sources of gas imports, which is a guarantee of uninterrupted supplies of the fuel whose role in Poland’s economy is constantly growing,” Majewski continued.

The PGNiG Group is the leader in the Polish gas market with 25,000 employees globally, according to the company’s website. Ineos announced the formation of its new Ineos Energy group in December 2020, with the new business incorporating all Ineos oil and gas assets. Last week, Ineos E&P AS, which is part of Ineos Energy, entered into an agreement to acquire Hess Denmark ApS for a total consideration of $150 million. 

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