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INEOS Energy sells its Norwegian oil and gas business to PGNiG for $615m

26 March 2021

INEOS Energy has announced an agreement with PGNiG Upstream Norway to sell its oil and gas business in Norway in a deal worth $615 million. The deal includes all INEOS Oil & Gas interests in production, licenses, fields, facilities and pipelines, on the Norwegian continental shelf.

Image: INEOS
Image: INEOS

In a statement, INEOS said the deal continues to rebalance its portfolio in terms of oil and gas and moves INEOS Energy towards a more operated position.

INEOS E&P Norge produces around 33,000 BOE per day from the Norwegian Sea. A 93% gas ratio, from 3 non-operated fields, Ormen Lange (14%), Alve (15%) and Marulk (30%). The business also holds 22 offshore licenses, of which 6 are operated, and has equity in the Nyhamna Terminal (8%).

The sale, which was effective as of 1 January 2021, is subject to approval by the Norwegian Ministry of Petroleum and Energy and the Norwegian Ministry of Finance. It is expected to complete later this year.

All 52 employees of INEOS E&P Norge AS will transfer to PGNiG Upstream Norway AS following completion of the deal. The PGNiG Group is the largest Polish oil and gas company employing 25,000 people worldwide.

Brian Gilvary, Executive Chairman of INEOS Energy said: “This represents another positive step in the INEOS Energy journey.  The deal allows us to monetise 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.  These assets are a very strong strategic fit for PGNiG and significantly extends their position in Norway."

Pawel Majewski, President of the PGNiG Management Board, said: “This is a transaction of particular importance for PGNiG. The takeover of all the assets of INEOS E&P Norge AS means a surge in production in Norway and will ensure a significant volume of gas for the Baltic Pipe gas pipeline. Therefore, it is an important contribution to the implementation of the strategic goals of the PGNiG Group. Our activities in Norway are closely related to the issue of Poland's energy security. From 2022, gas from Norwegian fields will be transported to the country thanks to the Baltic Pipe gas pipeline. This will increase the diversification of gas import directions, which in turn is a guarantee of uninterrupted supplies of this fuel, the importance of which for the Polish economy is constantly growing. PGNiG gas portfolio diversification is greater flexibility and the ability to offer customers attractive terms of trade.”

The announcement of the deal with PGNiG comes just days after INEOS announced its acquisition of Hess Denmark for $150 million. INEOS said both deals begin reshaping INEOS Energy as it progresses a strategy to position the businesses strongly in the coming energy transition.

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