Wintershall DEA

2024: A court in The Hague arrested Gazprom's stake in the joint venture

In early September 2024, it became known that the Hague court imposed a security arrest on shares owned by Gazprom in a joint venture with Wintershall Dea in the North Sea - Wintershall Noordzee. The arrest on Gazprom's share was imposed at the suit of the Ukrainian company Slavutich-Invest, which previously owned land in Melitopol.

Gazprom demanded to cancel this arrest. In March 2024, Gazprom International Limited began a competitive procedure for the sale of assets in the North Sea.

2023

BASF sells the company to the British Harbor Energy

The chemical concern BASF in December 2023 sold its oil and gas company Wintershall Dea to the British company Harbor Energy. Wintershall's offices in Hamburg and Kassel will be closed - with more than 800 people laid off three days before Christmas.

British oil company Harbour Energy acquires production and development, as well as exploration rights unrelated to Russia, for $11.2 billion in cash and stock. Thus, Germany is losing its only oil and gas company.

Downsizing after leaving Russia

On September 5, 2023, Wintershall Dea announced 500 job cuts, including 300 in Germany. The German oil and gas company explained its decision by changes in the energy sector and the curtailment of Russian business.

We have adjusted our corporate strategy in line with the changes in the energy sector and the exit from Russia, and now we will reorient our organizational structure accordingly, "said Mario Meren, CEO of Wintershall Dea.

Wintershall Dea announces 500 job cuts

The company has consistently reduced its workforce since Wintershall and Dea merged. As of 31 December 2019, Wintershall Dea employed 2,847 people. In 2020, 334 jobs were reduced, in 2021 - 28, in 2022 - 460 jobs. At the end of 2022, the number of employees was 2025 people.

Wintershall Dea's board will shrink to three members, with only CEO Mario Meren, COO Dawn Summers and CFO Paul Smith. CTO Hugo Dijkgraaf will leave the company on November 30, 2023, his areas of responsibility will be transferred to other board members. In early 2023, Tilo Wieland, responsible for Russia and Latin America, left the board.

It is noted that Wintershall Dea will allocate 225 million euros for the implementation of restructuring in the third quarter of 2023. WIntershall Dea expects that the restructuring will reduce administrative costs by €200 million per year, with almost half of this amount coming from job cuts.

Wintershall Dea will separate the business from enterprises with Russian participation. These include a stake in Wintershall AG in Libya (51% of the shares), in Wintershall Noordzee BV in the Netherlands (50%) and shares in Nord Stream AG (15.5%).^[1]

Study of options for withdrawal from assets in Russia and removal of personnel

The head of Wintershall Dea, one of the largest oil and gas companies in Europe, Mario Meren, said in April 2023 that the company was exploring available options for withdrawing from its Russian assets and removing personnel from the Russian Federation.

"We no longer see prospects for energy cooperation with Russia in the foreseeable future. Our decision is final. We've started taking appropriate steps in recent weeks.'

Write-off of 15.5% stake in Nord Stream

Wintershall Dea in February 2023 wrote off its 15.5% stake in Nord Stream due to the unpredictability of the recovery time.

Announcement of plans to write off assets in Russia for €5.3 billion

Wintershall Dea in January 2023 announced its intention to leave Russia, will withdraw from assets in the Russian Federation in accordance with current obligations. The company's loss from the write-off of Russian assets will amount to €5.3 billion.

Gazprom withdrew almost €2 billion in cash from joint ventures with Wintershall Dea

Gazprom has withdrawn almost €2 billion in cash from its joint ventures with Wintershall Dea, its executive director Mario Meren said in January 2023. According to him, the Russian gas monopoly simply "devastated" the company's joint accounts.

2022

Refusal to curtail business in Russia amid the crisis in Ukraine

Wintershall Dea does not plan to withdraw from current projects in the Russian Federation, will fulfill its contractual obligations, said the head of the company Mario Meren in July 2022.

LetterOne opposes IPO due to undervaluation of Russia-related assets

The LetterOne group of Mikhail Fridman and partners in January 2022 opposed the IPO of its joint oil and gas production company Wintershall Dea with the German BASF, promising to block it.

BASF is in favor of the listing, however LetterOne said it would "confront the growing pressure" to hold an IPO now. The Group explained that the Russian component of assets is wary of the market, and this, in its opinion, can "with a high degree of probability" affect the valuation of the company without reflecting the real business potential.

2019: Wintershall DEA education

In April 2019, it was announced that the German company Wintershall (a subsidiary of the BASF concern) and the company DEA (Deutsche Erdoel AG) Mikhail Fridman completed the merger procedure. The resulting Wintershall DEA was announced to be the largest independent producer of gas and oil in Europe.

As a result of the transaction, BASF, the owner of Wintershall, received 67% of Wintershall DEA, and LetterOne Fridman, German Khan and Alexei Kuzmichev, who controlled the DEA, - the remaining 33%.

The joint company was headed by Wintershall CEO Mario Meren. Meren is one of those lobbying in Europe for the construction of the Nord Stream 2 gas pipeline. Wintershall owns 15.5% of Nord Stream AG, the operator of the Nord Stream gas pipeline, the company also pledged to finance the Nord Stream-2 project. After the announcement of the deal with Friedman, Meren gave an interview to the German publication Handelsblatt, in which he stressed that the Nord Stream -2 project is "good, correct and important for Europe."

Meren's position is understandable. Wintershall is a long-time partner of Gazprom, both in gas supplies and in production projects. Wintershall DEA is going to continue to actively work in Russia.

"I assume that we will invest approximately 1.5-2.5 billion euros per year. Investments will primarily go where we are already active today: we will continue to invest in Norway, as well as in Russia, "Meren said in an interview.

In the company's business, approximately 70% is gas and 30% is oil.

"Russia is the strength of our portfolio. We can produce oil and gas there at a low cost of transportation. This is important for the reliability of our portfolio. So we can make money even with low oil and gas prices. That's what investors are paying for, "notes Meren.

Moreover, the deal with Friedman was closed against the background of BASF's failed financial results for the first quarter of 2019. Promises of future revenues from the deal with Russian oligarchs are one way to offset the impact of financial results on the market and investors.

The new company becomes, in fact, a competitor to Russian state-owned companies - Gazprom Neft, Novatek, Rosneft. Wintershall DEA will be able to count on new projects only in exchange for additional services, and first of all it will be about supporting and promoting Moscow's political and business interests in Europe, the Malyuta Skuratov telegram channel noted.

Alfa Group partners - Mikhail Fridman and German Khan - are becoming the main lobbyists for Moscow's interests in the West, primarily in Europe. Gazprom in this role is perceived too unequivocally, talk that it is necessary to reduce dependence on the supplies of the Russian state concern does not stop for decades.

Notes