INEOS Energy to acquire all oil and gas interests from HESS Corporation in Denmark
- INEOS E&P AS, a part of INEOS Energy, has entered into an agreement to acquire the subsidiary HESS Denmark ApS. for a total consideration of $150 million, effective January 1st
- The deal comprises 61.5% of the HESS operated Syd Arne oil field, complementing the 36.8% share INEOS already holds and 4.8% in the INEOS operated Solsort field.
- The acquisition strengthens INEOS’ portfolio, improves its balance of oil and gas assets, provides opportunities for organic growth and unlocks operational and cost synergies in the basin.
- The deepening of INEOS’ operating position in Denmark will also support INEOS Energy’s development of the Greensands carbon storage project in the INEOS operated Siri and Nini area fields.
INEOS E&P AS, which is a part of INEOS Energy, has today announced that it has entered into an agreement to acquire the subsidiary HESS Denmark ApS. for a total consideration of $150 million, effective January 1st 2021.
This is the first deal to be announced following the formation of the new INEOS Energy business, which incorporates INEOS’ Oil and Gas business.
As part of the deal INEOS will acquire 61.5% of the Syd Arne oil field, currently operated by HESS, which complements the 36.8% share INEOS already holds in the field. INEOS will also acquire 4.8% of the Solsort field, which is already operated by INEOS.
The HESS business in Denmark consists of operated assets focused on the production of oil.
Approximately 60 people will transfer to INEOS on completion of the deal, which is expected in the third quarter of this year, subject to government approval.
INEOS currently operates the Siri field area in Denmark. By becoming the Operator of Syd Arne INEOS expects to unlock operational and cost synergies between the two assets.
With this acquisition INEOS also plans to add further value through organic growth projects which will further extend the life of the asset within the context of the Danish Government’s decision to cease production on the Danish shelf by 2050.
The stronger operated position in Denmark fits well with INEOS’ leadership in the Greensands project, which plans to safely and cost effectively permanently store up to 8 million tonnes of CO2 per annum, in the INEOS operated Siri area, when the fields have ceased production.
Brian Gilvary, Executive Chairman of INEOS Energy said, “This deal represents a major step in reshaping our energy business. HESS was one of the earliest pioneers in developing this basin. This deal will open up future growth prospects that can be developed in Denmark’s offshore oil and gas sector, supported by a very promising carbon storage project helping to deal with future emissions.
The Greensands project in Denmark will make a significant contribution to our understanding and growth of carbon storage technology, whilst supporting Denmark’s wider CO2 emission reduction targets for 2030 and beyond.”
INEOS Energy - Brian Gilvary interview with Sky News
Richard Longden (INEOS) +41 21 627 7063 or + 41 7996 26123
Peter Hindsberger (INEOS Oil & Gas Denmark) +45 301 86697
Mark Killick (Mediazoo) +44 207 052 4838 or +44 7836 634449
Andrew McLachlan (Mediazoo) +44 207 384 6980 or +44 7931 377162
Notes to editors:
About INEOS Energy
- INEOS announced the formation of its new INEOS Energy venture on December 16th
- The new business will incorporate all existing INEOS Oil & Gas assets.
- Brian Gilvary is Executive Chairman of the new group bringing a wealth of experience to the role after a 34-year career in BP.
- INEOS is also involved in several projects to develop demand for hydrogen, replacing existing carbon-based sources of energy, feedstocks and fuel. It expects to develop further partnerships with leading organisations involved in the development of new applications.
- Through its subsidiary INOVYN, INEOS is Europe’s largest existing operator of electrolysis, the critical technology to produce hydrogen for power generation, transportation and industrial use. Its experience in storage and handling of hydrogen combined with its established know-how in electrolysis technology, puts INEOS in a unique position to drive progress towards a carbon-free future based on hydrogen.
- The primary objective of the Greensands project is to safely and permanently store potentially up to 8m tonnes of CO2 per annum in the INEOS operated Siri area.
- The storage potential, if achieved, will contribute significantly to Denmark’s 2030 overall emissions reduction target
- The Greensands project has three phases: Appraisal, Pilot (Proof of concept) and Full project execution.
- The Appraisal phase has field owners INEOS, and Wintershall Dea, plus consortium members Maersk Drilling and Danish Government backed GEUS .
- The project recently cleared a major hurdle as DNV GL independently certified that the Nini West field is conceptually suitable for injecting 0.45 million tons CO2 per year per well for a 10-year period, and that the subsea reservoir can safely contain the CO2.
- Pilot phase (Proof of concept) planning is underway with the FID potentially around Q3 2021 subject to the implementation of the agreements outlined in the Danish North Sea Agreement of Dec. 2020.
- The full project will commence on proof of concept and will have an estimated delivery duration of around 24 months after which carbon storage could be operational from around 2025.