Germany's Wintershall Dea could float up to 30% of its shares next year

The upstream player says it has no plans to exit Libya where production has been affected by political unrest

Abu Dhabi, United Arab Emirates, November 12, 2019.  
ADIPEC day 2.
--Wintershall Dea CEO and Chairman Mario Mehren.
Victor Besa / The National
Section:  NA
Reporter:  Jennifer Gnana
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Wintershall Dea, Germany's biggest upstream oil and gas player, could list up to 30 per cent of its shares in an initial public offering next year, as it looks to ramp up production from its assets in Abu Dhabi, Norway, Brazil, Argentina, Mexico and Egypt, according to its chief executive.

The company, a subsidiary of the world's largest chemicals company, BASF, is planning the IPO for "the second half of next year", its chief executive Mario Mehren said, noting that it is most likely to list in Frankfurt.

"How much is going to be floated is going to be considered at a later point in time but sure it won't be 100 per cent. It can be anything between 10 and 25 per cent and maybe 30 per cent if the market environment is really good," Mario Mehren told The National in an interview in Abu Dhabi.

"We’re a German company with German corporate governance so [a Frankfurt listing is] the most obvious thing. Whether there will a secondary listing somewhere is something we’ll have to consider next year," he added.

The German firm merged with DEA, owned by Russia's LetterOne, in May. Antitrust approvals from Argentina and Egypt — countries where Wintershall operates — were obtained following the merger.

The company has plans to raise its total production to 750,000 barrels of oil equivalent per day by 2023, from a ramp-up in upstream activities in Norway, Russia, Mexico, Brazil as well as Abu Dhabi, where it is one of the operators of the Ghasha ultra-sour gas concession.

Wintershall Dea operates a 10 per cent stake in the concession, which includes the Hail, Ghasha, Dalma, Nasr, Sarb, Bu Haseer, Shuweihat and Mubarraz offshore sour gas fields, alongside Russia's Lukoil, Austria's OMV and Italy's Eni. The partners are working towards a production capacity target of 400,000 barrels of oil equivalent per day by 2025. Wintershall Dea, which is currently drilling wells in the Ghasha-Hail hub, is targeting the development of the Shuweihat field after 2025. The company first entered Abu Dhabi's upstream sector by testing two wells in the Shuweihat concession.

Wintershall Dea, which also operates in Libya, has no plans to exit the country, Mr Mehren said, adding that operating in the politically-fragile North African state has been challenging this year.

"We continue to suffer [outages] there because it’s difficult if not impossible to bring international service companies in to do maintenance works. You have blockages of pipelines or export terminals and it’s extremely complicated in Libya, given the situation," he said.

Production from its Libyan assets is around 40,000 barrels per day, said Mr Mehren. The company operates eight oilfields in Libya, from which production averaged 60,000 bpd last year.

"We could produce much more from the onshore concession for sure but that requires much more maintenance," said Mr Mehren.

Wintershall Dea maintained production of 590,000 barrels of oil equivalent per day last year. Mr Mehren declined to specify volumes for this year but said output was 'significantly above" last year's level, with the company on track to reach its 750,000 bpd target in five years.

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