BASF and Gazprom Asset Swap Unwinds

BASF and Gazprom have announced that a previously planned swap of assets will not completed amid the current challenging political environment.

“We regret that the asset swap will not be concluded. We will continue our cooperation of over 20 years with Gazprom in our existing joint ventures,” said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE.

Earlier this December, Dr. Bock had confirmed that the swap was to be achieved by the end of the year.

BASF’s subsidiary Wintershall and Gazprom signed a Master Agreement to swap assets on December 23, 2013, through which German chemicals giant aimed to further expand its production of oil and gas and to exit the gas trading and storage business.

The swap would have seen the joint development of two additional blocks of the Achimov formation of the Urengoi natural gas and condensate field in western Siberia.

Wintershall would have transferred the jointly operated natural gas trading and storage business to Gazprom. These assets includes the 50% shares in the gas trading companies WINGAS, WIEH (Wintershall Erdgashandelshaus Berlin) and WIEE (Wintershall Erdgashandelshaus Zug), interests in natural gas storage facilities in Rehden and Jemgum, Germany, in Haidach, Austria, and the gas storage operator Astora.

Gazprom would have also received a 50% share in the activities of Wintershall Noordzee B.V., which is active in the exploration and production of oil and gas in the southern North Sea (Netherlands, UK and Denmark).

As a result of this announcment, the natural gas trading and storage business will continue to operate as a 50-50 joint venture between Gazprom and BASF Group company Wintershall. Wintershall Noordzee B.V. will remain a 100% BASF Group company.