Ineos to acquire Hess oil and gas assets in Denmark for $150million

Ineos has announced a $150million (£108m) deal to buy the oil and gas assets of Hess Corporation in Denmark.

The deal comprises a 61.5% stake of the Hess-operated Syd Arne oilfield, adding to the 36.8% stake Ineos already holds, and a 4.8% interest of the Ineos-operated Solsort field.

It is the first acquisition since the formation of the new Ineos Energy business, which incorporates its oil and gas business.

Around 60 people will transfer to Ineos from Hess once the deal completes, expected in the third quarter of the year, subject to government approval.

Ineos currently operates the Siri field in Denmark and, by becoming operator of Syd Arne, it expects to unlock “operational and cost synergies” between the two assets , particularly around its Greensand CCS project.

Denmark aims to cease oil production by 2050 and has recently announced plans to end new exploration for oil and gas.

However, Ineos said the deal will allow it to extend the life of the field and add further value through organic growth projects.

© Ineos

Brian Gilvary, the former CFO of BP who became executive chairman of Ineos Energy in December, said: “This deal represents a major step in reshaping our energy business.

“Hess was one of the earliest pioneers in developing this basin. This deal will open up future growth prospects that can be developed in Denmark’s offshore oil and gas sector, supported by a very promising carbon storage project helping to deal with future emissions.”

The deal strengthens the Ineos’ position in the Greensand CCS project in Denmark, in its operated Siri area, with plans to store up to eight million tonnes of CO2 per year when the fields have ceased production.

Mr Gilvary added: “The Greensands project in Denmark will make a significant contribution to our understanding and growth of carbon storage technology, whilst supporting Denmark’s wider CO2 emission reduction targets for 2030 and beyond.”

The sale comes as US-based Hess seeks to focus on prospective regions in South America.

CEO John hess said: “The sale of our Denmark asset enables us to further focus our portfolio and strengthen our cash and liquidity position.

“Proceeds will be used to fund our world class investment opportunity in Guyana.”