Norwegian firm Statoil has outlined plans to merge with Norsk Hydro's oil and gas business to create the world's largest offshore oil and gas operator.
The new company will produce 1.9 million barrels per day in 2007, with reserves of some 6.3 billion barrels of oil or equivalents. Norsk will continue its aluminium business.Jan Reinås and Jannik Lindbæk, Chairmen of the Board of Directors of Hydro and Statoil made a joint statement. 'Both Hydro and Statoil have developed competence and technologies acknowledged to be among the best in the global energy industry. By combining forces, the new company will be a highly competent and financially strong Norwegian-based energy champion, well positioned to ensure continued domestic excellence and pursue international business opportunities for long-term growth.''The industry faces an increasingly challenging international landscape. To merge now makes perfect sense,' they said.The new company will be 62.5% owned by the Norwegian government, with Hydro shareholders holding 32.7 percent, and Statoil shareholders holding 67.3 percent remaining shares.The merger should be approved by shareholders at each company's AGM and by regulatory authorities, with the final merger complete in the second half of 2007. In the meantime the two companies will operate independently.