The boards of key Norwegian oil companies Statoil ASA and Norsk Hydro ASA yesterday recommended the merger of their offshore oil and natural gas units.
If the merger is approved by shareholders and by the government, it would create the world's largest offshore oil operator, the companies said in a statement. The government, a key owner in both companies, reacted positively.
State-controlled Statoil is already the key operator on the offshore fields that make Norway the world's third-largest oil exporter, and Norsk Hydro is also a major player.
PHOTO: AFP
"The new company will be a highly competent and financially strong Norwegian-based energy champion, well positioned to ensure continued domestic excellence and pursue international business opportunities for long-term growth," said the chairmen of both boards in a joint statement.
A merged company would have total oil production of 1.9 million barrels per day, and proven oil and natural gas reserves of 6.3 billion barrels, the statement said.
A merger requires the approval of shareholders at a general meeting and by government regulatory authorities. Hydro's shareholders would hold 32.7 percent and Statoil's shareholders 67.3 percent of the new company.
Norwegian Prime Minister Jens Stoltenberg reacted positively to the announcement.
"This is the start of a new era. We are creating a global energy company," Stoltenberg said. "And the merger is an excellent foundation for meeting the challenges facing the oil and gas industry. The government sees the recommended merger as industrially and strategically well founded."
"This is a historic milestone. The time is right for one strong Norwegian-based energy champion," said Helge Lund, president and chief executive of Statoil.
The government owns 70.9 percent of Statoil, which is based in the Stavanger and employs about 24,000 people in 31 countries.
Norsk Hydro, based on the outskirts of Oslo, is 43.8 percent government-owned and employs about 33,000 people in 40 countries.
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