Oil and Gas activities

Exploration & Production

• Active portfolio management, including expansion of our position in Norway

Europe: The Mittelplate field off the North Sea coast is the cornerstone of our crude oil production in Germany. We own a 50% share in the next development phase of this largest known oil deposit in the country. We are expanding production in Emlichheim by drilling twelve new wells, two of which started producing between September and December 2016. Wintershall is assessing a redevelopment of the Suderbruch oilfield with two exploration wells. We continued the field test for increasing recovery rates using the biopolymer Schizophyllan at the Bockstedt oilfield.

In Norway, we were able to expand annual production to 80,000 barrels of oil equivalent (BOE) per day. The further development of fields in which we hold a stake included the installation of two subsea tiebacks in the Norwegian Sea for the Wintershall-operated Maria field in the summer of 2016. These were connected at a depth of 300 meters to the nearby platforms Kristin, Heidrun and Åsgard B, enabling us to use the existing infrastructure for production in the Maria field, in which Wintershall holds a 50% share. Wintershall also has shares in the Ivar Aasen offshore platform installed and started up in 2016. In January 2016, Wintershall obtained shares in seven new exploration licenses on the Norwegian continental shelf from the Norwegian Ministry of Petroleum and Energy. Wintershall will take over operatorship of four licenses.

As part of ongoing portfolio optimization, Wintershall Norge AS agreed with Statoil Petroleum AS (both based in Stavanger, Norway) on the sale of its 25% share in the Byrding field on the Norwegian continental shelf. The field, also known by its previous name, Astero, was discovered in 2005 and is located in the Troll/Fram region of the North Sea. Wintershall Norge furthermore divested its 10% share in the Yme license – also on the Norwegian continental shelf – to OKEA AS, an oil company based in Trondheim, Norway.

In Denmark, we are continuing the transition from the development to the production phase of the Ravn field. The crude oil is to be transported through a subsea pipeline from an unmanned production platform to the A6-A platform 18 kilometers away in the German North Sea. Ravn will be the first field in Denmark that Wintershall Noordzee B.V. (Rijswijk, Norway) transfers to the production phase as operator. The Danish energy ministry granted Wintershall three new licenses in the Danish North Sea at the beginning of 2016. Wintershall is the operator in all three licenses.

Russia: The Yuzhno Russkoye natural gas field in western Siberia, in which we have a 35% economic interest, has been operating at plateau production since 2009. We hold a 50% stake in the development of Block IA of the Achimov formation in the Urengoy field in western Siberia. The gradual development of this field was continued and 78 wells were producing at the end of 2016. We will develop blocks IV and V of the Achimov formation together with Gazprom.

North Africa / Middle East: In Libya, we are the operator of eight oilfields in the onshore concessions 96 and 97. Due to difficult political conditions, we were only able to start producing in concession 96 again on September 16, 2016, at a low level of 35,000 BOE a day. No production took place in concession 97 in 2016. At the Al Jurf oilfield off the coast of Libya, in which we have a stake, operations could be continued without interruption.

In Abu Dhabi, we began drilling our second appraisal well as operator in the development of the Shuwaihat sour gas field in November 2016. It is Wintershall’s first offshore exploration well in the Shuwaihat field.

Wintershall signed a memorandum of understanding in April 2016 with the National Iranian Oil Company on a potential collaboration.

South America: We hold shares in a total of fifteen onshore and offshore fields in Argentina. In February 2016, the offshore field Vega Pléyade, operated by Total Austral S.A., began production off the coast of Tierra del Fuego. We drilled additional wells as an operator in the Vaca Muerta shale formation in the Neuquén province, as stipulated in the joint operation agreement between Wintershall Energía S.A. (Buenos Aires, Argentina) and Gas y Petróleo del Neuquén S.A. (Neuquén, Argentina).

Natural Gas Transport

• Mostly regulated business with stable conditions
• Joint activities with Gazprom

The highly regulated natural gas transport sector is characterized by stable conditions and yields based on approved costs and tariffs. Our organizational structure allows us to meet the unbundling requirements set down by the German Energy Act: As a holding company for the German subsidiaries in natural gas transport, WIGA Transport Beteiligungs-GmbH & Co. KG (WIGA) mainly fulfills a reporting and financing capacity. GASCADE Gastransport GmbH, OPAL Gastransport GmbH & Co. KG, and NEL Gastransport GmbH all act as independent companies under the umbrella of the holding company.

The companies under the WIGA umbrella operate a 3,300-kilometer long-distance network that includes the pipeline links to the Nord Stream Pipeline, the Baltic Sea Pipeline Link (OPAL) and the North European Gas Pipeline (NEL).

We hold a 15.5% share in the Nord Stream Pipeline through Nord Stream AG, based in Zug, Switzerland, which is accounted for in the BASF Group’s financial statements using the equity method. Other shareholders are Gazprom (51%) and E.ON (15.5%), as well as N.V. Nederlandse Gasunie and ENGIE (9% each). With a total capacity of 55 billion cubic meters of natural gas per year, this pipeline, which stretches from Russia to the German coast over the Baltic Sea, helps shore up supply security in Europe.

The contracts signed in 2015 to join the companies involved in the Nord Stream 2 AG were canceled in September 2016 after withdrawal of the antitrust clearance application in Poland. BASF continues to firmly believe in the significance of this project for Europe, and is evaluating possibilities to support the endeavor. The project is being developed by Nord Stream 2 AG, a project company in which Gazprom holds 100% of the shares.