Aker BP, Lundin Energy boards agree to merger

Dec. 21, 2021
Aker BP and Lundin Energy plan to merge, creating Norway’s second largest oil and gas producer.

Offshore staff

OSLO, Norway/STOCKHOLM, SwedenAker BP and Lundin Energy plan to merge, creating Norway’s second largest oil and gas producer with cumulative production next year of more than 400,000 boe/d.

The combined company will operate six major production hubs on the Norwegian continental shelf (NCS) with further growth in prospect through the NOAKA and Valhall NCP/King Lear projects in the North Sea.

It will also be the second largest owner of the Johan Sverdrup oil field (31.6%) and a partner in the Wisting oil development in the Barents Sea. These projects, some with low break-even costs, could lift the new group’s production above 500,000 boe/d by 2028.

Aker BP Chairman Øyvind Eriksen said: “In 2016 we created Aker BP together with BP when we combined Det norske and BP Norge…Already when we created Aker BP, a subsequent acquisition of Lundin Energy was a vision shared between BP and Aker.

“Today the vision has become a reality. We are seizing an opportunity that will make a difference for both Aker and Norway for decades to come…

“Our mutual strategic interests have also provided opportunities to expand our strong relationship into new areas, including digitalization, offshore wind, and oil services.”

Aker BP CEO Karl Johnny Hersvik added: “We are now creating the E&P company of the future which will offer among the lowest CO2 emissions, the lowest cost, high free cash flow and the most attractive growth pipeline in the industry…

“We know the Lundin organization well and we are convinced that we will make an even better Aker BP together.”

The combined group would hold reserves of more than 2.7 Bboe and could deliver operational synergies of up to $200 million per year.

Lundin Energy’s onshore renewable assets in the Nordic nations, with forecast power generation of 600 GWhr/yr once fully constructed, are not part of the planned combination and will remain as a standalone renewable energy business.

The company also has to take care of an ongoing legal case in Sweden in relation to past operations in Sudan.

Assuming Norway’s authorities approve the merger, Aker BP’s executive management team would run the combined company. All personnel associated with Lundin Energy’s oil and gas assets in Norway will transfer to Aker BP with a work location in Oslo.