Non-Integral Oil and Gas Business
BASF holds 67% of the ordinary shares in Wintershall Dea AG; 33% are held by LetterOne. This reflects the value of the exploration and production businesses contributed by Wintershall and DEA. BASF additionally holds preference shares for the contribution of Wintershall’s gas transportation business. Including preference shares, BASF has a shareholding of 72.7% in Wintershall Dea.
The price of a barrel of reference Brent crude oil averaged $71 in 2021 (2020: $42). Gas prices on European spot markets rose sharply and were at an all-time high at the end of 2021. The significant price increases in the second half of 2021 were driven by the very strong recovery in global macroeconomic demand.
Equity-accounted income of the oil and gas business
Wintershall Dea AG contributed –€344 million to net income from shareholdings in 2021 (2020: –€890 million). This included impairments and reversals of impairments totaling –€581 million, mainly in connection with the planned divestiture of assets in Argentina and due to adjusted price expectations. In the previous year, lower oil and gas price forecasts and changed reserve estimates led to impairments of €791 million.
Wintershall Dea conducts production, development1 and exploration activities in the following countries:
- Egypt (production, development, exploration)
- Algeria (production)
- Argentina (production, development, exploration)
- Denmark (production, exploration)
- Germany (production, development, exploration)
- Libya (production)
- Mexico (production, development, exploration)
- Netherlands (production, development, exploration)
- Norway (production, development, exploration)
- Russia (production, development)
- United Arab Emirates (development)
- United Kingdom (production, development, exploration)
Wintershall Dea’s activities in 2021
Wintershall Dea produced 231 million BOE (barrels of oil equivalent) in 2021 (2020: 227 million BOE), of which around 165 million BOE of gas (2020: 162 million BOE of gas). This corresponded to a daily production of 634 thousand BOE (2020: 623 thousand BOE).
Several development projects were successfully completed in 2021, including the Norwegian projects Ærfugl Phase 2, Gråsel, and the field development of Solveig. The Achim Development joint venture operated by Gazprom in Russia, in which Wintershall Dea holds a 25.01% interest, started production in the first quarter of 2021. In Egypt, production at the Raven field started at the beginning of the year.
The Norwegian Njord and Nova projects continued and are expected to come on stream in 2022. The start of production for the Dvalin project in Norway was postponed to the second half of 2022. At the beginning of 2022, Wintershall Dea reached an agreement on the sale of its 50% interest in the unconventional oil blocks it operates in Argentina and decided to terminate its operations in Brazil.
Wintershall Dea drilled 12 exploration wells in 2021. Of these, around 58% were successful.
Wintershall Dea is also active in gas transportation. This includes interests in GASCADE Gastransport GmbH and OPAL Gastransport GmbH & Co. KG held by WIGA Transport Beteiligungs-GmbH & Co. KG, and the interest in Nord Stream AG held directly by Wintershall Dea. Wintershall Dea is one of five financial investors for the Nord Stream 2 pipeline project. It is not a shareholder of Nord Stream 2 AG. The laying of Nord Stream 2 was successfully completed, the pipelines have been filled with gas and Nord Stream 2 AG has applied to the relevant authorities for certification to operate the pipeline.
As part of its climate strategy, which was communicated in November 2020, Wintershall Dea aims to achieve net zero emissions2 from upstream activities by 2030 and reduce methane intensity3 to 0.1% by 2025. Wintershall Dea is involved in the Greensand CCS project4 in the Danish North Sea, which aims to store up to 8 million metric tons of CO2 per year.
As planned, in 2021 Wintershall Dea completed the integration that began with the merger and was able to realize the intended synergies. The IPO targeted for 2021 was postponed due to the market environment.
1 Development activities include projects before and after the FID (final investment decision)
2 Scope 1 and 2 emissions from upstream activities operated and non-operated by Wintershall Dea at an equity basis
3 100% volume of methane emissions of Wintershall Dea’s operated assets divided by the volume of the own operated gas marketed
4 Carbon capture and storage