A iven the tense political situation in relation to Russia have stopped a billion dollar business of the world’s largest chemical company BASF and the energy giant Gazprom. This was announced by BASF in Ludwigshafen. It was about a complex barter, which was originally planned for the year.
The plan was that BASF subsidiary Wintershall the previously jointly operated natural gas trading and storage business completely transfers to Gazprom. This would also have the Kassel gas trading company Wingas affected. Gazprom would have also acquired a 50 percent stake in Wintershall Noordzee that promotes in the North Sea oil and gas. In return, the joint development of gas fields in Western Siberia was provided.
A difficult political environment
“Due to the current difficult political environment, BASF and Gazprom have decided the end of the year not to carry out the planned exchange of shares, “said Wintershall spokesman Stefan Leunig. Overall wore the activities that BASF wanted to bring into the trade business, in 2013 about 12 billion euros sales.
The relations between Russia and the EU are currently strained. The EU, Russia had occupied because of the conflict with Ukraine sharp economic sanctions. Early December had BASF CEO Kurt Bock stresses the planned swap deal with Gazprom will be completed by the end of the year.
“Our strategy remains unchanged”
The natural gas trading business now reportedly still continued as a joint venture between Gazprom and Wintershall. Hambrecht Bock said he regrets that the exchange will not be completed. The Group will continue its cooperation with Gazprom in the existing joint venture. “Our strategy in the oil and gas business remains unchanged. We focus on profitable growth at the source in selected oil and gas-rich regions”
The stop of Business has also impact on BASF numbers. Therefore, earnings before interest and taxes (EBIT) is expected in the current year only “slightly” instead of “significantly” increase in 2013 EBIT is corrected to 7.1 billion euros down. The charges amounted to 113 million euros BASF last year and 211 million euros this year.
“This is the beginning of the end”
The proposed transaction with the government-related Gazprom Group had been criticized because of Russia’s role in the Ukraine crisis. In early December had decided a change of strategy for Europe after the stop of the trans-European gas pipeline South Stream Gazprom. Russia’s attitude to the European market is changing fundamentally, Gazprom CEO Alexei Miller said. “This is the beginning of the end of our model, in which we focus on delivery to the end user oriented on the European market,” Miller said.
The CEO justified the change of course by Gazprom with the EU bureaucracy, which had brought Stream to failure and South. The European Commission had complained that Gazprom should provide both the gas and operate the line. This is incompatible with EU law. The gas pipeline South Stream would primarily intended to supply the countries of South East Europe with gas from Russia. In early December, Russia had announced the stop of the project.
The now stopped barter had BASF and Gazprom announced two years ago. Gazprom wanted to get access to the important retail market in Western Europe so originally. BASF would have adopted so that the gas trade.
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