Ineos buys Hess out of Danish North Sea

In a rare transaction for the Danish North Sea, oil company Ineos is acquiring Hess Denmark and thereby taking control of the country's Syd Arne field.

Photo: Ineos PR

It's been a while since a big trade took place in connection with the Danish North Sea.

Thus, it's all the more noteworthy that Ineos announces its acquisition of Hess Denmark today, Thursday, thereby taking over majority interest in Denmark's Syd Arne field in the North Sea, a press statement informs.

The transaction is said to be worth USD 150m, Ineos' price paid to take over Hess' 61.5-percent stake in Syd Arne, adding to Ineos' existing position of 36.8 percent.

Ineos thus holds complete ownership of the asset.

At the same time, Ineos is buying 4.8 percent of another field, Solsort, which it already operates. That agreement dated Jan. 1, 2021.

It's the second time in a short while that Ineos buys a partner out of Denmark. The same thing happened last year, when the company took over the shares of Spirit Energy, which thereby – just like Hess – left the Danish North Sea.

"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," Ineos writes in the statement.

Been up for sale before

"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," writes Ineos Energy Executive Chair Brian Gilvary in a press statement.

Here, Gilvary refers to Project Greensand, where Ineos and partners Wintershall Dea, Maersk Drilling and the Geological Survey of Denmark and Greeland (GEUS) are planning a major CCS undertaking at Ineos-operated oil field Nini Vest.

For Ineos, the deal is taking place under the auspices of its new unit, Ineos Energy, announced late last year. 

Hess has previously tried, unsuccessfully, to offload its Danish oil business. However, the group has also help the door open for a sale ultimately meaning an full exit from the domestic sector.

In 2019, Hess Denmark's most recent fiscal year, the company booked a deficit of USD 91m due to an unsuccessful drilling at a site dubbed Jill.

As things appear at the moment, the parties expect the agreement to enter force during Q3 this year.

English Edit: Daniel Frank Christensen & Jonas Sahl Jørgensen

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