VNG evaluating options for Norwegian subsidiary
German-based utility VNG AG is exploring strategic options including “a strategic partner” for its oil and gas exploration and production business in Norway and Denmark, VNG Norge AS.
The company on the 18th January said it engaged Citigroup to assist VNG AG in the evaluation of different options.
“As VNG AG sees long term value creation potential in the E&P-business, the main objectives are to maximize the value of VNG Norge and to support further growth to position the shareholding as a leading player on the Norwegian Continental Shelf together with a strategic partner,” VNG said.
VNG’s Norwegian subsidiary being reviewed has recently filed a development plan for the Fenja field in the Norwegian Sea. It is the operator of the field with a 30 percent stake, with partners being Point Resources (45%) and Faroe Petroleum Norge (25%).
Reuters in November 2017 reported VNG was looking to sell VNG Norge for up to US$500 million.
A spokesperson said: “We are not looking to sell down parts of ownership in Fenja or other assets. The main objective is to maximize the value of VNG Norge AS and support the further growth. That’s why we are looking for a strategic partner to realise this plan together.”
As for the Fenja field, the partners are planning to invest NOK 10.2 billion (US$1.2 billion), with planned production start in 2021. The production period is expected to be 16 years. The field contains recoverable resources of approximately 100 million barrels oil equivalents, mostly oil.
Overall, at the end of 2017, VNG Norge held interests in 32 licences in Norway, two in Denmark and participated in five producing fields and in three field developments. Earlier this week VNG was offered 8 offshore blocks in Norway as part of the APA 2017 licensing round – two as operator, six as a partner.
The company, based in Stavanger and Oslo, has approximately 100 employees and generated sales of approximately €365 million in 2016.