* BASF gains access to two Siberian gas/oil blocks
* Gazprom gets gas trading, storage units in Europe
* Gazprom also gets Dutch gas/oil unit
(adds Berlin ministry reserving right to intervene)
By Ludwig Burger and Vera Eckert
FRANKFURT, Nov 14 BASF will grant
Russian gas company Gazprom full control of their
jointly run European gas trading and storage activities to gain
more access to Siberian gas fields.
"Through the swap, BASF aims to further expand its
production of oil and gas and to exit the gas trading and
storage business," German chemicals group BASF said in a
statement on Wednesday. It declined to provide a deal value.
"The traditional natural gas trading business,..., offers
(BASF oil and gas subsidiary) Wintershall little possibility for
differentiation," it added.
Pending regulatory approval, the no-cash transaction would
be completed by the end of 2013, but the Berlin Economy ministry
said it reserved the right to veto any decision.
Gazprom, for its part, has long been seeking better access
to nearby downstream European markets where margins are still
lucrative, even if pipeline gas from origins such as Russia has
come under margin pressure as a result of cheap new shale gas
output from North America.
State-controlled Gazprom's tighter grip on European energy
markets could be a politically sensitive issue as governments
are concerned about too much reliance on Russia.
Russia's wrangling with gas transit country Ukraine in 2006
and 2009 disrupted westbound gas supply in mid-winter.
During a few days last winter, Gazprom could not meet all of
Italy's short-term gas orders, with the gas company saying more
storage tanks were needed.
A BASF spokeswoman said the company has notified the EU
Commission and the Federal Antimonopoly Service of Russia of its
intentions, as required by the EU, which seeks to ensure its
desired single energy market stays sustainable and competitive.
Analysts say wholesale gas trading in the EU already is
highly developed and Gazprom would have to subject itself to EU
rules that enforce price transparency and fair access.
A spokeswoman for the Energy Commissioner said that under
energy directives, storage owners are required to give access to
third parties and to be independent from suppliers.
RUSSIA GAINS FOOTHOLDS IN TRADING, STORAGE
Apart from seeking gas assets in Europe, Russia has also
been acquiring oil refinery stakes in Germany.
Russian oil company Rosneft now commands around a fifth of
German refining capacity after buying a stake in German oil
company Ruhr Oel from Venezuela's PDVSA.
BASF's deeper involvement in Russian exploration comes
despite Russian media reports last month that a proposed
increase in the country's mineral extraction tax (MET) was
deterring the German group.
BASF on Wednesday said the tax did affect its negotiation
position. "We have taken the tax increase into consideration in
the valuation of the assets," a spokeswoman said.
Two more blocks of the Achimov formation of the Siberian
Urengoi gas field will be made available to Wintershall, which
has long been a partner in the field's exploration with Gazprom.
BASF will receive 25 percent plus one share of blocks IV and
V with the option to raise the stake to 50 percent.
The blocks, according to Russia's mining authority, have gas
and hydrocarbon condensate resources of 2.4 billion barrels of
oil equivalent (boe). The start of production is planned for
In return, Wintershall will give Gazprom the remaining 50
percent of shares the Russian firm does not already own in the
joint venture trading firms Wingas and two smaller gas trading
units, WIEH of Berlin and WIEE of Zug, Switzerland.
Gazprom will also receive the shares it does not already own
in major European gas storage units in Rehden and Jemgum,
Germany, as well as Haidach, Austria. Rehden is Europe's largest
gas storage facility.
A 50 percent holding in activities of Wintershall Noordzee,
which an oil and gas producer in the southern North Sea, is also
part of the Gazprom package, while BASF will retain its holdings
in gas pipeline transmission networks in Europe.
DZ Bank analyst Peter Spengler said the deal was beneficial
"The gas trading market in Europe is highly regulated and
margins decrease over time," he said, adding that gas
exploration and production offers higher margins and less
dependence on the business cycle.
BASF said the businesses it was transferring to Gazprom
contributed 350 million euros ($445 million)to its 2011 earnings
before interest and tax and 8.6 billion euros to 2011 group
A note from Warburg Research said, "From Gazprom's point of
view, the deal gives the company direct access to the European
distribution gas market and provides the world's biggest
producer with a significant market share in its key market."
($1 = 0.7867 euros)
(Additional Reporting by Andreas Rinke, Melissa Akin, Barbara
Lewis, Markus Wacket; editing by Keiron Henderson)