BASF, Gazprom Complete Asset Swap – Quick Facts

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German chemical giant BASF SE (BFA.L, BASFY.PK) and Russian gas pipeline systems operator OAO Gazprom (OGZPF.PK, OGZPY.PK, GAZP) have completed the swap of assets with equivalent value effective at the end of September 30, 2015, financially retroactive to April 1, 2013.

With the swap, BASF is further expanding its production of oil and gas and has exited the gas trading and storage business.

As per the transaction, Wintershall, a 100 percent subsidiary of BASF, receives the economic equivalent of 25.01 percent 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, which focuses on oil and gas exploration and production.

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 tons of condensate, 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). Gazprom also received a 50 percent share in the activities of Wintershall Noordzee B.V.

Together these activities contributed about 12.2 billion euros to sales and around 260 million euros to EBITDA of BASF Group in 2014 and about 7.2 billion euros to sales and around 240 million euros to EBITDA of BASF Group in the first half of 2015.

Following the closing of the transaction, Dr. Gerhard König has left the Board of Executive Directors of Wintershall Holding and has transferred to Gazprom in his function as Chairman of WINGAS.

 

 

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