INEOS Energy to acquire HESS Denmark, operator of Syd Arne oil field
UK-based INEOS Energy, through its subsidiary INEOS E&P, has agreed to acquire Hess’ subsidiary HESS Denmark, a Danish upstream company, for $150 million.
The HESS business in Denmark is engaged in handling operated assets focused on the production of oil. Nearly, 60 personnel of HESS Denmark will transfer to INEOS upon closing of the deal, which is anticipated in Q3 2021, subject to approval from the Danish government.
The deal gives INEOS Energy, HESS Denmark’s operating stake of 61.5% in the producing Syd Arne oil field (South Arne oil field) in the Danish North Sea. INEOS Energy already has a 36.8% stake in the field.
In the fourth quarter of 2020, Hess’ share in the Syd Arne oil field production was an average of 5,800 barrels of oil equivalent per day net.
Apart from that, INEOS Energy will also acquire an additional 4.8% stake in the Solsort field in Danish waters, which is already operated by the company.
John Hess – CEO of Hess said: “The sale of our Denmark asset enables us to further focus our portfolio and strengthen our cash and liquidity position.
“Proceeds will be used to fund our world class investment opportunity in Guyana.”
The deal marks the first for INEOS after forming the new INEOS Energy venture, which incorporates INEOS’ oil and gas assets.
Presently, INEOS operates the Siri field area in Denmark. The company said that by becoming the operator of the Syd Arne oil field, it anticipates unlocking operational and cost synergies between the assets.
Furthermore, the acquisition will enable INEOS to add further value via organic growth projects for further extending the life of the asset which aligns with the Danish government’s decision to stop production on its territorial waters by 2050.
Brian Gilvary – Executive Chairman of INEOS Energy said: “This deal represents a major step in reshaping our energy business. HESS was one of the earliest pioneers in developing this basin.
“This deal will open up future growth prospects that can be developed in Denmark’s offshore oil and gas sector, supported by a very promising carbon storage project helping to deal with future emissions.
“The Greensands project in Denmark will make a significant contribution to our understanding and growth of carbon storage technology, whilst supporting Denmark’s wider CO2 emission reduction targets for 2030 and beyond.”