E.ON Norwegian oil and gas business to be sold to Russian billionaire

E.ON purchased by Mikhail Fridman’s Alfa Group

The sale of the oil and gas division of E.ON is subject to approval by Norwegian authorities and the European Commission.  Photo courtesy E.ON.

BERLIN – German-based oil and gas firm DEA Deutsche Erdoel AG announced on Wednesday that it plans to buy 100 per cent of the Norwegian utility E.ON’s oil and gas business in a deal worth US$1.6 billion.

DEA, a former unit of energy company RWE that now belongs to an international investment arm of Russian billionaire Mikhail Fridman’s Alfa Group, said the deal will more than double its current production in Norway.

The sale which includes $100 million in cash is subject to approval by Norwegian authorities and the European Commission.

According to DEA, the company will be purchasing equity interests in 43 licences in three producing oil and gas fields, including Skarv, Njord and Hyme.  DEA will also acquire interests in additional developments and discoveries, including Snilehorn, Snadd and Fogelberg, as well as a broad portfolio of exploration licences on the Norwegian Continental Shelf.

“This acquisition in Norway is a perfect fit to our renewed business strategy,” said Thomas Rappuhn, CEO of DEA Deutsche Erdoel AG.  Rappuhn added “it will grow our reserves, significantly increase our production and add growth optionality to our portfolio”.

DEA supervisory board chairman Lord Browne said the planned acquisition is the first step in the company’s new growth strategy. He said that it “has access to substantial financial resources” and he expects it to make more investments in the Norwegian continental shelf and other core areas.

DEA has had a Norwegian presence for over 40 years though its subsidiary DEA Norge AS.  The company currently holds 31 licences and is the operator in several exploration licences and the Zidane field.