BP, Aker form joint offshore oil venture in Norway

This deal, in which Dek norske oljeselskap has agreed to buy BP’s local business, effectively creates what will be the largest independent producer by volume in Norway, and it will be controlled by Norwegian billionaire Kjell Inge Rokke.

Aker BP will be jointly owned by current Det norske shareholder Aker by 40%, other Det norske shareholders by 30% and BP by 30%. BP will have only a 30 per cent stake in the Oslo-listed company, but matching its mature assets with Det norske’s growing and efficient operations makes sense. “We believe the transaction will yield significant value for both Det norske, BP and Aker’s shareholders”, he added.

Det Norske shares surged as much as 16%, the biggest gain in four years to a record high, and were up 7.1% at 90.85 kroner as of 10.42am in Oslo.

BP will also receive a cash payment of $140 million. The deal is still subject to regulatory review and shareholder approval, but it is expected to close by the end of the year. In addition to the attractive combination of the two companies’ Norwegian asset portfolios, Aker BP will benefit from the combined strength of Det norske’s efficient, streamlined operating model and BP’s long experience in Norwegian offshore operations, asset knowledge, technical skills and worldwide experience. It is the operator of producing fields Alvheim, Volund, Vilje and Jette and of the large Ivar Aasen development.

The new company, which will include all of Det norske’s assets but only a small proportion of BP’s, will also provide an opportunity to cut costs as oil companies worldwide battle with a 55-percent fall in the price of crude since June 2014.

BP’s roughly 850 Norway-based employees will transfer to the combined group upon completion of the deal.

Last month, Statoil increased its stake in Swedish oil firm Lundin Petroleum (LUPE.ST) to 20 percent, one of its partners in Johan Sverdrup, bolstering its dominance. “We are pleased to take advantage of the industrial expertise of both companies to create a large independent E&P company”, said BP group chief executive Bob Dudley.