COMPANY NEWS: Teekay Shipping to acquire Statoil's Navion unit

Dec. 23, 2002
Teekay Shipping Corp. inked an agreement to acquire from Norway's Statoil ASA its Navion ASA shipping and offshore business unit for $800 million. In late 2001, Statoil had acquired full ownership of Navion after purchasing Rasmussen Group's 20% share in the company for $175.4 million (OGJ Online, Sept. 4, 2001).

Teekay Shipping Corp. inked an agreement to acquire from Norway's Statoil ASA its Navion ASA shipping and offshore business unit for $800 million. In late 2001, Statoil had acquired full ownership of Navion after purchasing Rasmussen Group's 20% share in the company for $175.4 million (OGJ Online, Sept. 4, 2001).

In other recent company news:

Chesapeake Energy Corp. of Oklahoma City signed an agreement to acquire US Midcontinent natural gas assets for $300 million through the acquisition of a wholly owned subsidiary of Tulsa-based Oneok Inc.

EnCana Corp., Calgary, will acquire Vintage Petroleum Inc.'s indirect wholly owned Ecuadorian business unit, Vintage Oil Ecuador SA, for $141.7 million. The deal is expected to close Jan. 31, 2003.

India's state-owned Oil & Natural Gas Corp. (ONGC) and private-sector giant Reliance Industries Ltd., Mumbai, indirectly locked horns over the sell-off of the Indian government's stake in refining firms Hindustan Petroleum Corp. Ltd. (HPCL) and Bharat Petroleum Corp. Ltd. (BPCL).

Teekay acquisition

"The transaction positions Teekay as a strategic logistics provider of shuttle tanker services to Statoil and other oil companies, and increases Teekay's presence in the conventional crude oil and product tanker trades," Statoil said. During 2001, Navion transported a total of 160 million tonnes of crude oil and petroleum products. During that same year, Teekay transported 135 million tonnes of oil and products, the company said.

Included in the transaction is Navion's offshore loading business comprising its fleet of vessels: 9 owned shuttle tankers, 17 time chartered-in shuttle tankers (which includes 4 vessels from Teekay's shuttle tanker unit Ugland Nordic Shipping AS), 2 floating storage and offloading vessels, 12 chartered-in crude oil tankers, 9 chartered-in product tankers, and 1 gas carrier. Teekay also will acquire Navion's conventional tanker business and the chartering joint venture with Statoil.

Teekay currently owns and operates 17 shuttle tankers, which represent about 25% of the worldwide shuttle tanker fleet.

The transaction becomes effective Jan. 1, 2003, and is expected to close during second quarter 2003, Statoil said.

Chesapeake-Oneok deal

Chesapeake said that the assets being acquired hold 200 bcfe of proved reserves (94% of which is gas) and 60 bcfe of probable and possible reserves and produce 47 MMcfed of gas. The proved reserves have a reserves-to-production ratio of 11 years, Chesapeake said, and are 88% proved developed.

Chesapeake expects the transaction to close Jan. 31.

Included in the sale are Oneok's interests in several fields, including South Panola, Red Oak, Wilburton, Brooken, and Quinton in the Arkoma basin and Hugoton, Watonga-Chickasha, Carpenter, Strong City, Clinton, Arapaho, Morewood, Thomas, Eakly, Verden, Sahara, Bradley, Golden Trend, and Springer in the Anadarko basin. Chesapeake said that 87% of the assets being acquired are within townships in which it already holds properties.

Chesapeake said the acquisition will increase the company's proved reserves to nearly 2.5 tcfe of gas and its current production to more than 565 MMcfed of gas.

EnCana in Equador

The Vintage unit's properties had working capital of about $25.7 million as of June 30. At yearend 2001, Tulsa-based Vintage said that the properties held proved reserves estimated to be 50.4 million bbl of oil.

Earlier this year, extensive production and pressure tests indicated that the first of two horizontal wells on Oriente Block 17 in Ecuador appeared capable of producing oil at rates in excess of 10,000 b/d from Cretaceous Lower Napo U, operator Vintage reported (OGJ, Oct. 21, 2002, p. 51).

Vintage said that it parted with the assets in an effort to reduce its debt by $200 million. By yearend 2001, Vintage carried long-term debt of just more than $1 billion. For yearend 2002, the company estimates it will have reduced its debt to $811 million.

Vintage's exit from Ecuador comes close on the heels of another fellow independent's exodus from that country. Earlier this year, Kerr-McGee Corp., through two subsidiaries, completed the sale of all Ecuadorian assets to Perenco Ecuador Ltd., a unit of privately held French E&P firm Perenco SA, and another, unidentified firm for $88 million (OGJ Online, Sept. 17, 2002).

Vintage plans to sell additional US assets in 2003 as well as other assets deemed to be noncore to the company, Robert Phaneuf, vice-president, corporate development, told OGJ.

ONGC-Reliance debate

The debate over India's oil sector privatization turned bitter with ONGC attempting much-needed forward integration and Reliance trying to further strengthen its hold on the refinery sector, following its recent purchase of Indian Petrochemicals Corp. Ltd. (IPCL).

Disinvestment Minister Arun Shourie said that no sale of government equity in the oil sector would happen until March 2003. At that time, HPCL would be divested through the strategic sale route, while BPCL's sale would be through an initial public offering.

Shourie sought to bar ONGC from bidding on the grounds that the take- over of one public sector company by another is not privatization. However, Oil Minister Ram Naik and Defense Minister George Fernandes have taken the stand that either ONGC should be permitted to bid for the HPCL stake or else Reliance should be barred from bidding, since it already has a 70% market share in the petrochemical sector.

The two ministers have cited the case of Indian Oil Corp., which was barred from the IPCL deal on the grounds that it controlled 60% of the petroleum retail market after its acquisition of IBP Ltd.