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21.02.2019

Significant growth planned for Wintershall DEAProduction increase of 40 percent by the early 2020s envisaged

Significant growth planned for Wintershall DEA
© Wintershall/Damm&Bierbaum

Kassel. The merger of the longstanding German companies Wintershall and DEA is progressing. So far, the companies have applied for all relevant governmental approvals and aim for closing during the first half of 2019. The merger will make Wintershall DEA the largest independent gas and oil producer in Europe.

The new company seeks to increase Wintershall’s and DEA’s joint average daily production of about 575,000 barrels of oil equivalent (pro-forma 2017) by around 40 percent to 800,000 barrels between 2021 and 2023. This growth is expected to come from both companies’ existing portfolio as well as new production regions like Mexico, where DEA has made a recent entry, and Abu Dhabi, where Wintershall entered into a new oil and gas concession.

Through the merger, synergies of at least €200 million per year are expected from production increases and cost reductions. Of a total of 4,200 jobs worldwide (full-time positions including joint ventures), plans include reducing around 1,000 jobs in a socially compatible manner, of which approximately 800 jobs in Germany. In Norway it is planned to reduce around 200 jobs, mainly related to the completion of ongoing large development projects.

More than half of the job reductions in Germany are planned within the corporate functions at both locations in Hamburg and Kassel. Additional staff reductions are planned at the German production sites. Wintershall DEA's future Business Unit Germany will be headed out of Hamburg.

Within the merged company, Barnstorf (Lower Saxony), the current headquarter of Wintershall’s German operations, will comprise a production site with different well services, the recently opened technology centre, the central core storage facility and the centre for the vocational training. DEA’s laboratory and core storage facility in Wietze, Lower Saxony, will be relocated to Barnstorf. The Wietze location will be closed.

The staff reduction and shift of activities are subject to consultation with the co-determination bodies. The corresponding consultation processes in Germany started in January 2019. In Norway, this process has been ongoing since November 2018. Wintershall and DEA have guaranteed that forced redundancies shall not be used until 30 June 2020. Likewise, there will not be any site closures in Germany during the same period. The social partners are currently working on socially compatible solutions regarding the necessary personnel adjustments.

Wintershall Holding GmbH, based in Kassel, Germany, is a wholly-owned subsidiary of BASF in Ludwigshafen. The company has been active in the extraction of natural resources for 125 years, and in the exploration and production of crude oil and natural gas for over 85 years. Wintershall focuses on selected core regions where the company has built up a high level of regional and technological expertise. These are Europe, Russia, North Africa, South America, and increasingly the Middle East region. The company wants to expand its business further with exploration and production, selected partnerships, innovation and technological competence. Wintershall employs about 2.000 staff worldwide from 50 nations and is now Germany’s largest, internationally active crude oil and natural gas producer.

At the end of September 2018, BASF and LetterOne signed a binding agreement to merge their respective oil and gas companies, Wintershall and DEA (Deutsche Erdöl AG). Subject to regulatory approvals, the transaction is expected to close in the first half of 2019. Wintershall DEA would become the leading independent oil and gas producer in Europe. BASF and LetterOne are planning an initial public offering (IPO) for Wintershall DEA in the medium term.

Wintershall. Shaping the future.

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