The German chemical giant BASF has announced that it agreed to merge its oil and gas division Wintershall with the energy company DEA, which belongs to LetterOne Energy. The new company, which will be called Wintershall DEA, will become the largest independent oil and gas company in Europe.

Since LetterOne Energy belongs to the Russian oligarch Friedman, this is a unique opportunity for a company from the Russian Federation to overcome the sanctions regime and get a large share of the Western market. In addition, the transaction will be extremely beneficial for BASF, as it will allow the German concern to increase its share in the global oil and gas market.

The exploration and the raw materials extraction have been named as the main areas of the Wintershall DEA development. At the same time, the new company should annually increase its production volumes in order to ensure its long-term presence in the world market. For this, the company intends to take a leading position among European energy companies, and to bypass its competitors from Italy, France and Spain.

Initially, the daily production level of the Wintershall DEA will be 590,000 barrels in the fields in Russia, Africa and North America. The explored reserves of these deposits reach a mark of 2.1 billion barrels in oil equivalent.

The shareholding of Wintershall DEA is distributed as follows: 67% of securities belong to BASF, 33% - LetterOne Energy. According to the agreement, in the future, BASF has the opportunity to strengthen its position in the new company, by merging with Wintershall DEA its pipeline division. The IPO will be held in the second half of the next year.

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