Var Energi Launches

Norway's Eni said December 12 that the merger of its Norwegian upstream subsidiary with Point Resources into new company, Var Energi, is now complete. It will be 69.6%-owned by Eni and 30.4% by HitecVision. Hitec announced completion December 10; the merger plan was first announced July 2.

It added that this is pending certain conditions being met, among which were securing third-party financing of $3bn non-recourse to sponsors, plus securing regulatory approvals. Var Energi’s creation is "a major step forward in the strategy to reinforce Eni’s presence in OECD countries with further upstream potential," said Eni.

Var Energi has 800 staff and stakes in 17 oil and gas fields (five of which it operates) with net 2018 production of 170,000 barrels of oil equivalent per day (boe/d) and reserves/resources of over 1.25bn boe. Existing fields' production is expected to reach 250,000 boe/d by 2023. Its CEO is Kristin Kragseth and its chairman is Philip Hemmens; respectively ex-CEOs of Point Resources and Eni Norge. Its non-operated gas fields include Kristin and Tyrihans, while Var also has a 12.3% stake in the Ekofisk oil and gas field.

The new firm's operated Goliat oilfield (65% Var, 35% Equinor) saw, on December 11, Norwegian safety regulator PTIL order it to draw up a realistic, binding plan for outstanding safety-critical work. This followed an early 2018 audit of the Barents Sea field’s floating production ship (FPSO) - then run by Eni - which came after an unplanned shutdown and problems in 2016.

Other instances of newly-formed Norwegian upstream independents include Aker BP, Spirit Energy (Centrica with Bayerngas), and the planned Wintershall DEA merger. Total's takeover of Maersk Oil, completed in March 2018, also consolidated each side's E&P assets in the region.

In other news on December 12, Norwegian upstream regulator NPD said that an exploration well sunk by Equinor on PL751, in the Norwegian Sea some 15km southeast of Njord, was dry.