Oil and Gas Business

The price of a barrel of Brent crude oil averaged $64 in 2019 (previous year: $71). Gas prices on the European spot markets declined significantly compared with the previous year.

Discontinued oil and gas business until April 30, 2019

Wintershall’s earnings were presented in income after taxes from discontinued operations until the merger of Wintershall and DEA on May 1, 2019. This figure included the income after taxes of the former Wintershall companies (€237 million) and the deconsolidation gain of €5,684 million.

Until April 30, 2019, Wintershall produced 19 million barrels of oil equivalent (BOE) and condensate, and around 44 million BOE of gas. Most of this was produced in Russia (around 36 million BOE) and Norway (around 12 million BOE). In Norway, production was expanded at the Aasta Hansteen gas field, which is operated by Equinor. Wintershall was awarded new exploration licenses in Norway and Argentina in early 2019. In the first four months of 2019, one successful exploration well was drilled in Norway.

Equity-accounted oil and gas business from May 1, 2019

Since May 1, 2019, BASF has reported its share of Wintershall Dea’s adjusted net income in EBIT before special items and in EBIT of the BASF Group, presented under Other. Adjustments include, in particular, effects from the remeasurement of the assets and liabilities of the former Wintershall. Adjustments will be made for additional depreciation charges and the results of any asset sales. The company contributed minus €86 million to the BASF Group’s EBIT in the period from May 1, 2019, to December 31, 2019.

Wintershall Dea conducts production, development and exploration activities in the following countries:

• Egypt (production, development, exploration)
• Algeria (production, development)
• Argentina (production, development, exploration)
• Brazil (exploration)
• Denmark (production, exploration)
• Germany (production, development, exploration)
• Libya (production, exploration)
• Mexico (production, development, exploration)
• Netherlands (production, exploration)
• Norway (production, development, exploration)
• Russia (production, development)
• United Arab Emirates (development, exploration)
• United Kingdom (production, development, exploration)

Between the merger on May 1, 2019, and December 31, 2019, Wintershall Dea produced 151 million BOE,¹ of which around 109 million BOE of gas.¹

In the second quarter of 2019, Wintershall Dea sold its German oil storage activities. In the fourth quarter of 2019, Wintershall Dea sold shares in the Aguada Federal and Bandurria Norte blocks in Argentina, as well as its shares in the Polarled pipeline and the Nyhamna terminal in Norway.

Investment projects that were already underway continued as planned. These include, in particular, the Nova and Dvalin projects operated by Wintershall Dea in Norway. The two fields are being developed by means of a subsea tieback, with production facilities on the seabed connected to existing platforms. The drilling phase commenced for Dvalin and production is expected to start in 2020. In Russia, the Achim Development joint venture operated with Gazprom, in which Wintershall Dea holds a 25.01% interest, started the field development of blocks 4A and 5A in the Achimov Formation. Another investment focus is Egypt, especially the Nile Delta.

The Achimgaz joint venture with Gazprom drilled the last of a total of 108 production wells. The company can now produce at a plateau rate of 10 billion cubic meters of gas per year as planned.

Wintershall Dea drilled 18 exploration wells¹ in the period from May to December 2019. Of these, 121 were dry wells and were written off.

Wintershall Dea is also active in gas transportation. This includes interests in GASCADE Gastransport GmbH, OPAL Gastransport GmbH & Co. KG, and Nord Stream AG. Wintershall Dea is involved in the financing of the Nord Stream 2 pipeline project but does not hold an interest in the company.

In September 2019, Wintershall Dea placed its inaugural bonds worth €4 billion.