Bloomberg: BASF Turns Driller to Shield Chemical Maker From Shale: Energy

Europe’s largest chemical maker is expanding oil and natural gas production faster than BP Plc (BP/), Royal Dutch Shell Plc (RDSA) and Total SA. (FP)

BASF SE (BAS), which agreed to acquire stakes in two Siberian fields yesterday, expects oil and gas production to increase 3.8 percent annually to about 440,000 barrels a day in the next three years, a plan that adds output quicker than any of Europe’s largest energy producers.

Founded 147 years ago as a dye manufacturer, BASF is Germany’s single largest user of natural gas. Chief Executive Officer Kurt Bock wants control of fuel supply to cut exposure to commodity price swings and blunt the advantage of U.S. rivals with access to cheap shale gas. The deal with Russia’s OAO Gazprom (OGZD) comes less than a month after a $1.4 billion asset swap with Statoil ASA (STL) to gain stakes in North Sea fields.

“BASF is clearly one of the companies that will provide Europe with energy in the next years,” said Lars Hettche, an analyst at Bankhaus Metzler.

Yesterday’s deal will boost BASF’s resources by the equivalent of 600 million barrels of oil, according to DZ Bank analyst Peter Spengler, or about nine months of German crude demand. BASF, which has increased oil and gas production 5 percent a year since 2000, is set to surpass industry stalwarts such as Hess Corp. (HES) and Marathon Oil Corp. as a producer over the next three years.  MORE