Wintershall Says Norway To Drive Growth
BASF upstream subsidiary Wintershall on March 7 outlined its plans for 2018 at an annual press briefing at its Kassel HQ in Germany. Norway will remain a key focus of investment, while Brazil will become its newest exploration region.
Wintershall said full year 2017 profits before interest and tax (Ebit) and special items increased by 53% to €793mn ($985mn), from €517mn in 2016. The rise was primarily due to higher oil and gas prices plus the higher earnings contribution from its share in Russia's Yuzhno Russkoye gas field.
Two weeks ago, owner BASF in annual results said that its oil and gas business’s pre-tax earnings in 4Q2017 (Ebit) before special items grew by €97mn year on year to €260mn, and that full year 2017 production was stable at 449,300 barrels of oil equivalent/day (boe/d). Proven oil and gas reserves grew by 3% year on year to 1.677mn boe at end 2017.
Wintershall said it plans to invest more than €2bn upstream offshore Norway between 2017 and 2020. Its Norwegian oilfield Maria came onstream December 2017, almost one year ahead of schedule, with costs 25% lower than planned, and the company says it will deliver its development plan for the Nova oil and gas project in 1H2018. It expects the large Statoil-operated Aasta Hansteen oil and gas field – in which Wintershall has a 24% interest – to come on stream in 2018.
Of its planned merger with Russian-owned DEA, Wintershall said March 7 the new venture would produce some 600,000 boe/d, of which three-quarters from Wintershall, with the combined entity becoming one of the top five producers offshore Norway. Completion is targeted for 2H2018.
On lending to Nord Stream 2 (NS2), Wintershall repeated what BASF had said two weeks earlier: that it had agreed to finance up to €950mn for NS2, of which already €324mn had been lent at end-2017. The project is still believed to be pending approval from Denmark, through whose exclusive economic waters the planned route passes.
CEO Mario Mehren said: “Compared with 2016, we have significantly increased our economic performance and improved our profitability. We are clearly on course for growth.” “Our plans for 2018 are based on an average crude oil price (Brent) of $65/b and an average exchange rate of $1.20/€. Gas prices in northwest Europe are are likely to be on a level with 2017. We expect a considerable increase in sales and Ebit before special items, driven by positive price effects and the start of production at fields in Norway."
BASF upstream subsidiary Wintershall on March 7 outlined its plans for 2018 in Kassel, Germany saying that Brazil will become its newest exploration region.