Corporate M&A

Equinor Divests Remaining Minority Stake in Lundin Energy

By Deepak Sharma
May 07, 2020
a minute read
Equinor's Johan Sverdrup field in the North Sea

Norwegian oil major Equinor ASA has divested its remaining 4.88% minority shareholding in Lundin Energy AB, for total proceeds of approximately SEK3.3 billion (US$336 million). Following the sale, Equinor no longer holds any shares in the Swedish E&P company.

Equinor had previously acquired an ~11.9% minority stake in Lundin for a total purchase price of approximately SEK 4.6 billion in early 2016, and subsequently increased its stake to around 20% pursuant to a swap agreement to exchange its entire 15% interest in the Edvard Grieg field for an increased shareholding in the company. In July last year, Lundin entered into an agreement with Equinor to redeem 54.5 million of its own shares, representing a 16% stake, at an aggregate cost of SEK14.5 billion. The companies had also entered into an agreement at the time for the transfer of an additional 2.6% stake in the Johan Sverdrup development project to Equinor, for an initial consideration of US$910 million, plus certain additional contingent payments.

Commenting on the development, Equinor’s CFO Lars Christian Bacher said “We have created significant value and increased our direct exposure in the Johan Sverdrup field. Although we are now no longer a shareholder in Lundin, we continue to consider the company a strong partner on the Norwegian Continental Shelf.”

The Johan Sverdrup field is being developed in two phases, with Phase 1 estimated to cost around US$9.1 billion. Recently, Equinor said that the field is expected to reach plateau production this month, earlier than anticipated. Equinor is the operator of the field with a 42.63 % interest, while other partners include Lundin (20%), Aker BP ASA (11.57%), Petoro AS (17.36%), and TOTAL SA (8.44%).

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