* Tullow shares rise 6.6 pct, Statoil up 3.2 pct
* Any dilutive deal faces uphill battle in Parliament
* Statoil has plenty of assets to develop - analysts
OSLO, Jan 10 Norwegian energy firm Statoil
is considering major acquisitions that would dilute the
state's stake, Bloomberg reported, a move that would face an
uphill battle in parliament as the minority government would
need some opposition support.
State-controlled Statoil is looking at potential targets,
including Tullow Oil as it wants to reduce its focus on
Norway and as the government is seeking to cut its stake from 67
percent to 51 percent, said the report, citing unnamed sources.
"I'm not sure such a proposal would get through parliament
even if both the Conservatives and the Progress Party are
positive on reducing the government's stake to 51 percent," said
Joerund Rytman, trade and industry spokesman for the ruling
He pointed out that a deal would require backing from either
of two centrist parties, the Liberals and the Christian
Democrats, in addition to the government itself.
"Diluting the state's stake has not been a topic for
discussion by parliament so far but I'm sure it will be as part
of the upcoming white paper on ownership," Rytman said. "This is
not something that will happen overnight."
Statoil and London-listed Tullow both declined to comment.
The government plans to present a white paper by the middle
of the year on state ownership in firms such as Statoil,
aluminium producer Norsk Hydro, bank DNB, and
telecoms firm Telenor in what it said would be the
first concrete move to cut stakes.
"There has been no decision on the sale of Statoil shares
and we have no further comment on this speculation," the oil
Although the government, which came to power in October,
wants to cut its stake in Statoil, any deal would be
time-consuming. It would need to first present its strategic
approach in the white paper, then convince some opposition
lawmakers to back its plans.
Statoil shares were up 3.2 percent at 1156 GMT and Tullow
was up 6.6 percent, both outperforming a 1 percent rise in the
European oil and gas index.
Tullow, whose market capitalisation is just under $13
billion, has been among the worst-performing stocks in Europe's
oil and gas sector with its shares falling 38 percent over the
Bernstein analyst Oswald Clint played down talk Tullow could
be on Statoil's shopping list given the Norwegian firm's own
success at discovering oil and gas fields in recent years.
"They aren't as in need of purchasing assets at this point
as they were in the past decade so it feels a little bit
unlikely to me," he said.
Statoil's hand is also limited in making very large
acquisitions as its post-dividend free cash flow is negative
because of high investments and the firm has been selling assets
in recent years to raise cash.
"This is a continuous process for Statoil, which has a large
department that works on acquisitions of both companies and
assets," DNB Markets analyst Helge Andre Martinsen said.
"Historically they have been more interested in going for
assets or companies with a very concentrated portfolio with a
clean fit into their existing assets, rather than a large