NEWS

Aker BP has agreed to buy the Norwegian unit of U.S. oil firm Hess in a $2 billion deal, the companies said on Tuesday.

Hess is the latest global oil company to abandon or scale back its presence in Norway, following partial divestment by BP and Exxon Mobil in 2016 and 2017, respectively.

The price per share will be determined via a book building auction, with the minimum set at 155 Norwegian crowns, slightly above Monday’s closing of 154.8 crowns in Oslo.

“Aker BP has a clear ambition to be the leading independent offshore exploration and production (E&P) company. This transaction is an important step in that direction,” Chief Executive Karl Johnny Hersvik said in a statement.

Following the deal, Aker BP plans to raise its dividend payout to $350 million per year from $250 million, with the first increase planned for its fourth-quarter dividend.

“Aker BP will also assume Hess Norge’s tax positions, which include a tax loss carry forward with a net nominal after-tax value of $1.5 billion, as booked in Hess Norge’s 2016 annual accounts,” the company said.

The transaction raises Aker BP’s stakes to 100 percent in Norway’s Valhall and Hod fields, where it sees significant value creation potential through increased oil recovery and developing adjacent resources, it said.

“Aker BP will subsequently seek to sell or swap a minority interest in the fields to partners who want to work together with Aker BP to proactively target the upside potential in the area,” it said.

“With the continued success of our asset sale program, we are focusing on higher return assets and reducing our breakeven oil price,” Chief Executive John Hess said in a statement.