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(Alliance News) - Norwegian oil company Aker BP said Tuesday it would acquire Sweden's Lundin Energy's oil and gas activities in a merger valued at NOK125 billion, about EUR12.3 billion.
London-listed oil major BP PLC, which held a nearly 28% stake in Aker, will have a 15.9% stake in the combined company.Â
The company will be the largest of its kind "focused purely on the Norwegian Continental Shelf", the companies said in a statement, creating a new heavyweight after Norway's state-owned energy giant Equinor.
The combined firm is expected to produce 400 million barrels of oil equivalent next year. With reserves estimated at 2.7 billion barrels, it hopes to raise production to more than 500 million barrels by 2028.
Aker BP Chief Executive Karl Johnny Hersvik said the merger will create an exploration and production "company of the future which will offer among the lowest CO2 emissions, the lowest cost, high free cash flow and the most attractive growth pipeline in the industry".
He said it would also provide investors with strong dividends, pledging to increase them by at least five percent per year if oil prices remain above USD40 per barrel.Â
The merger will see Lundin Energy shareholders receive USD2.2 billion in cash plus newly-issued stock in Aker.
source: AFP
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