Norwegian industrialist Kjell Inge Røkke said Friday he was “very proud” that the Norwegian division of British oil giant BP “had chosen” to merge with Norwegian oil company Det norske, which Røkke has controlled through his Aker concern. The deal represents the latest consolidation in an industry hit by the dive in oil prices.
Røkke said the merger will turn Det norske into “a leading independent oil company” but its name is set to disappear. The merged company will be called Aker BP ASA, with a total of 1,400 employees.
Aker ASA owns 49.99 percent of the shares in Det norske. Its chairman Øyvind Eriksen, who also serves as chief executive of Aker, said the merger was the result of “years of tight cooperation between BP and Aker.” He told newspaper Dagens Næringsliv (DN) that BP had contacted them two weeks ago, wondering if Aker was interested in renewing talks about a merger that was first proposed as long as 11 years ago.
Eriksen said he and Røkke flew to London with a matter of hours, “and here we are today.” He called it “one of my best days as chief of Aker and said he was “overwhelmed” by the positive response to the deal. The Norwegian Continental Shelf needs consolidation, he added, and claimed the merger was in Norway’s best interests as an oil-producing nation.
Aker will own a 40 percent stake in the newly consolidated company, with BP holding 30 percent and remaining shareholders of Det norske the other 30 percent. It will be based in Oslo after Det norske effectively buy BP’s Norwegian operations for NOK 10.8 billion. (For details on the deal, see Aker’s stock exchange announcement, external link.)
BP Norge currently has offices in Stavanger and Sandnessjøen, while Trondheim-based Det norske also has offices in Lysaker, Stavanger and Harstad. Marit Arnstad of the district-oriented Center Party was quick to claim she wanted to see the Trondheim office remain open.
The combined firm will have ownership interests in 97 oil and gas field licenses on the Norwegian Continental Shelf, of which it operates 46. Aker ASA claimed the new company will have oil and gas reserves equal to 723 million barrels of oil equivalents.
Bob Dudley, chief executive of BP, traveled to Oslo to attend Friday’s press conference. He claimed it was “fantastic” to be in Oslo, said the Norwegian shelf represents “considerable” opportunities, and that BP looked forward to work with Aker to grow further and operate more efficiently.
“We couldn’t be more pleased with the merger between Det norske and BP,” he said. “Everyone knows there’s huge competition in the oil and gas world now. This will come to be a fantastic, independent Norwegian oil company.”
Karl Johnny Hersvik, chief executive of Det norske, was also raving about the deal. “We are extremely proud,” Hersvik said calling the deal “an extraordinary transaction.”