Russia’s Gazprom and German BASF To Swap Assets

Posted: November 20, 2014 in Econ 101, Free Trade, Technology and Energy

SOURCE: http://interfaxenergy.com/gasdaily/article/14230/gazprom-and-basf-still-planning-asset-swap

Gazprom and BASF still planning asset swap

By Alexey Novikov
Posted 19 November 2014 12:01 GMT

Gazprom and Germany’s BASF are still discussing a deal to swap assets, despite EU sanctions and the Russian gas giant’s plans to reassess its strategy for its presence in target markets

The European market is currently not a consumer market. We need to critically ask the question: do we need to go to the end consumer on a market that is not a consumer market? Gazprom is critically analysing and considering the strategies that it has been following recently,” Gazprom Chief Executive Alexei Miller said last month at the St. Petersburg International Gas Forum.

BASF subsidiary Wintershall is one of Gazprom’s partners in the South Stream pipeline, which appears to have stalled in the face of opposition from Brussels. Gazprom has a 50% stake in the project and Wintershall has 15% – the other partners are Eni (20%) and EDF (15%) (see Financing for South Stream delayed until 2015, 10 October 2014).

Miller met BASF head Kurt Bock in Ludwigshafen on Tuesday. They “discussed the progress of the deal to exchange assets between Gazprom and Wintershall Holding. It was noted that strengthening the companies’ positions along the whole production chain would make it possible to increase the reliability of gas supplies to end consumers,” Gazprom said.

The deadline for the asset swap deal is firmly the end of December 2014; otherwise, the deal will be annulled. BASF had optimistically said the deal would be closed in the middle of the year, but Gazprom always talked about closing the deal in 2014.

It was reported earlier that, as a result of the deal, Gazprom will acquire full ownership of joint gas trading and storage companies in Europe – Wingas, WIEH and WIEE, and get a 50% stake in Wintershall Noordzee, a company that explores for and produces hydrocarbons in the North Sea.

Wintershall, in turn, will receive a 25.01% economic stake in the project to develop sections 4A and 5A of the Achimov deposits of the Urengoy oil and gas condensate field.

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