Italy-based multinational energy company Eni and HitecVision, a private equity investor in the upstream offshore oil and gas industry, agreed to merge Point Resources AS with Eni Norge AS, renaming the company Var Energi AS.
The combined entity will be an independent Norwegian exploration and production company, built on the existing organizations' leveraging of complementary strengths, according to the simultaneous announcements from each of the companies on Monday.
The portfolio of the combined company will have a geographical coverage ranging from the Barents Sea to the North Sea, including the production of 180,000 barrels of oil equivalent per day (boepd) from 17 oil and gas fields, according to the companies' press releases.
The company's resources are indicated to have a capacity of 1,250 million barrels of oil (mboe) equivalent, the press releases also said.
According to the statements, production is expected to reach 250,000 boepd by 2023 after developing more than 500 mboe in ten existing assets, with a breakeven price of less than $30 per barrel.
In total, the new company plans to invest more than NOK 65 billion ($8 billion) over the next five years to bring these projects onstream, revitalize older fields and explore for new resources.
“This is a fundamental step ahead in our strategy to reinforce Eni’s presence in OECD countries with further upstream potential, such as Norway," Claudio Descalzi, CEO of Eni stated in the press release.
"The high quality of the human capital as well as of the assets in the portfolio, together with the expansion opportunities still available in Norway, will create a significant upside value to the shareholders of the merged company. Eni will bring into Var Energi its globally recognized capacity to innovate and its best technology, which has enabled us to achieve remarkable results in recent years, through great discoveries and the startup of these discoveries in a record time” Descalzi added.
Eni and HitecVision will jointly own Var Energi AS with a 69.6 percent and 30.4 percent stake, respectively.
The shareholders have agreed the key strategy and objective of the company, both press releases said.
By Muhsin Baris Tiryakioglu