Page 14 - EurOil Week 23

EurOil INVESTMENT EurOil

Premier renegotiates North Sea

deal with BP

POLAND UK producer Premier Oil has renegotiated a deal depending on future oil and gas prices.
to buy North Sea assets from BP and has ended a BP will also recover 100% of abandonment
Premier may have dispute with its biggest creditor. costs at Shearwater and 50% of these costs at
rescued the deal from Premier revealed in January it had agreed to Andrew, reducing Premier’s pre-tax decommis-
collapse. buy BP’s Andrew Area and Shearwater assets sioning costs from $600mn to $240mn.
for $625mn, while also striking a deal to acquire The new deal also means ARCM has dropped
an extra 25% in the Tolmount field from South its opposition, after earlier launching a court
Korea’s Dana Petroleum for $191mn plus $55mn case against Premier to try to block the acquisi-
in contingent payments. But Hong Kong-based tions. Premier will issue 82.2mn of new shares to
creditor Asia Research and Capital Management ARCM, representing 8.9% of the company. The
(ARCM) opposed the moves as too risky given creditor will use these shares to reduce its current
Premier’s large debts, estimated at $1.91bn at the short position.
end of April. Premier is also making “good progress” on a
The oil price crash in March cast further stable platform agreement with lenders on 40%
doubt on whether the transactions would be of its debt facilities, which mature in May 2021.
completed. In May, Premier said it was consult- “We are pleased to have agreed revised terms
ing with shareholders, creditors and brokers on with BP for the proposed acquisition of the
the deals “in light of current market conditions.” Andrew Area and Shearwater assets, which are
It also asked BP to lower its price. materially value accretive for the company,” Pre-
New terms have now been agreed with the mier CEO Tony Durrant said. “The stable plat-
UK major, however, Premier said in a statement form agreement, once agreed with and approved
on June 5. The cash payable upon completion has by lenders, will provide a basis for the company
been lowered to just $210mn, but BP will keep to continue discussions regarding proposed
$300mn of interim cash flow from oil and gas amendments to the group’s existing credit facil-
sales. The major will be paid a further $115mn ities.” ™

Poland’s Orlen offers to sell Lotos

stake in BP JV to finish merger

POLAND POLAND’S state-controlled refiner PKN Orlen Reuters reported, citing a person familiar
has offered to sell Lotos’s stake in a JV with BP with the matter. LABP focuses on domestic
The European in order to get the European Commission to sales of JET-A1 aircraft fuel to end clients and
Commission has agree to the planned takeover of Lotos, Reuters middlemen. It has also started direct jet fuel
raised concerns about reported on June 5. sales to aircrafts and agency services outside
the merger distorting Poland has long said it would like to merge of Poland.
competition. PKN Orlen with Lotos in order to create a Orlen also offered to increase fuel supplies to
stronger combined company that can compete LABP, access to jet fuel storage capacity for three
internationally. Orlen is looking to buy at least airports, and build a new jet fuel import terminal
a 53% stake in Lotos. The Polish state controls at an airport, according to Reuters.
both companies with a 27.52% stake in Orlen The Commission is expected to issue a deci-
and 53.19% stake in Lotos. sion on the merger on July 22. ™
In August, the European Commission
opened an investigation into the proposed
merger over concerns that it “may reduce com-
petition in the supply of fuels and related mar-
kets” in Poland and the region.
Addressing the Commission’s concerns,
Orlen offered to sell Lotos’s stake in the latter’s
JV with BP, Lotos – Air BP Polska (LABP),

P14 www. NEWSBASE .com Week 23 11•June•2020