Hydro, Statoil to merge oil and gas units

18 December 2006 07:52  [Source: ICIS news]

SINGAPORE (ICIS news)--Norwegian energy majors Hydro and Statoil have agreed to merge their oil and gas activities, creating the world’s largest offshore operator, the companies said on Monday.

 

The new company will have a combined production of 1.9m bbl/day in 2007 and proven oil and gas reserves of 6.3bn barrels of oil equivalents. Hydro will continue as a global aluminium company, it said in a statement.

 

Hydro’s shareholders will hold 32.7% and Statoil’s shareholders will hold 67.3% of the new company. The Norwegian state will hold approximately 62.5% in the merged entity.

 

The proposed merger is expected to close in the third quarter 2007 and a new name for the merged company will be selected as part of the integration process.

 

“The industry faces an increasingly challenging international landscape. To merge now makes perfect sense,” Jan Reinas and Jannik Lindbaek, chairmen of the board of directors at Hydro and Statoil, said in a joint statement.

 

The boards of the two companies have proposed that Eivind Reiten, president and ceo of Hydro, will become chairman of the new company while Helge Lund, who is president and ceo of Statoil, is to become president and ceo of the new entity.

 

The merged entity will have operations in close to 40 countries, and its main business areas and operations will be managed from Bergen, Oslo and Stavanger.

 

Following the transaction, the new company will employ 31,000 people.

By: Jeanne Lim
+65 6780 4359

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