VNG Explores E&P Sale

Another European utility, this time Germany’s VNG, is ‘exploring all options’ for its upstream business.

Engie is exiting the upstream, Centrica and Bayerngas’s E&P units were recently combined into Spirit Energy, and BASF and L1 plan to create a new independent ‘Wintershall-DEA’.

Leipzig-based gas wholesaler VNG, itself 74.21%-owned by leading German power group EnBW, said January 18 it will “explore strategic options for its oil and gas exploration and production business in Norway and Denmark, VNG Norge” adding that it has engaged Citigroup to assist with the evaluation of different options.

VNG said that as it “sees long term value creation potential in the E&P business, the main objectives are to maximise the value of VNG Norge and to support further growth to position the shareholding as a leading player on the Norwegian Continental Shelf together with a strategic partner." As at end-2017, VNG Norge – wholly owned by VNG -- holds interests in 32 licenses in Norway, two in Denmark and participates in five producing fields and in three field developments; last month it filed a plan for the $1.2bn development of the Fenja oil and gas field in the Norwegian Sea.

VNG's statement was not explicit on whether the review is targeting an outright or partial selldown of VNG Norge equity, or a merger with another E&P partner in which VNG/EnBW would retain equity.