Norway's Statoil Buys Minority Stake in Lundin Petroleum

  • Explorer doesn't plan to seek representation on Lundin's board
  • Acquisition agreed at `attractive price' amid weak oil market

Statoil ASA, Norway’s biggest energy company, snapped up a 12 percent stake in Lundin Petroleum AB to increase its access to the giant Johan Sverdrup field.

Statoil bought about 37 million shares in the Stockholm-based company for about 4.6 billion kronor ($540 million), it said Thursday in a statement. The Norwegian producer supports Lundin’s management, board and strategy and has no plan to increase its stake.

“We consider this a long-term shareholding,” Statoil Chief Executive Officer Eldar Saetre said in the statement. “This transaction indirectly strengthens our total share of the value creation from core, high-value assets” on the Norwegian Continental Shelf.

Lundin holds the second-largest stake in the North Sea’s Johan Sverdrup field, Norway’s biggest offshore project in decades with recoverable oil and gas estimated at 1.7 billion to 3 billion barrels. Statoil already has a 40 percent share in the deposit.

Purchase Price

The acquisition corresponds to a price per share of about 124 kronor, in line with Lundin’s average price over the past 30 days, according to data compiled by Bloomberg. Lundin shares have dropped about 20 percent since crude started to tumble in mid-2014. Brent oil, the global benchmark, is now trading near $30 a barrel.

“The market situation made it possible for us to secure this position at an attractive price,” Baard Glad Pedersen, a spokesman at Statoil, said by phone. The Stavanger-based company won’t seek representation on Lundin’s board, he said.

Lundin rose as much as 7.9 percent, the most since August, and traded up 7.7 percent at 103.9 kronor as of 10:58 a.m. in Stockholm, paring its decline this year to 15 percent. Statoil dropped 2.3 percent to 102.3 kroner in Oslo.

The Johan Sverdrup field is scheduled to start production at the end of 2019. Lundin holds a 23 percent stake, Petoro AS 17 percent, Det Norske Oljeselskap ASA 12 percent and A.P. Moeller-Maersk A/S 8 percent.

“This is a positive move; they’re buying a company whose main assets they know really well,” Trond Omdal, an analyst at Pareto Securities AS in Oslo, said by phone. “Some of these assets are not for sale -- Johan Sverdrup obviously.”

The acquisition may have benefits beyond increased access to Sverdrup, according to Omdal. Lundin has a “strong Barents Sea exposure,” he said, citing the Alta/Gohta discovery, close to the Johan Castberg development. “It shows that Statoil believes in higher oil prices than where they are currently.”

Statoil’s Saetre said last week that although oil may not have hit a bottom, prices will recover eventually and the company will stick to its dividend policy.

Before it's here, it's on the Bloomberg Terminal.