Eni to buy Neptune for $4.9 billion

Italian energy firm Eni and its Norwegian unit Var have reached a deal to buy UK-based Neptune for $4.9 billion.

Neptune is an independent exploration and production company with a portfolio of gas-oriented assets and operations in Western Europe, North Africa, Indonesia, and Australia.

The firm is currently owned by China Investment Corporation, funds advised by Carlyle Group and CVC Capital Partners, and certain management owners.

Eni said in a statement it will acquire assets comprising Neptune’s entire portfolio other than its operations in Germany and Norway.

The German operations will be carved out prior to the Eni transaction and the Norwegian operations, will be acquired by Var directly from Neptune under a separate share purchase agreement.

The Var transaction will close immediately prior to the Eni transaction with the proceeds from the Norway sale remaining with the Neptune global business purchased by Eni.

Var is listed on the Oslo Stock Exchange and is 63 percent owned by Eni.

The transaction remains subject to a number of customary closing conditions and Eni expects to close it in the first quarter of 2024.

Hammerfest LNG and Bontang LNG

Neptune’s production in Indonesia of over 20 kboed came from the Eni-operated Jangkrik and Merakes fields which supply gas to the Bontang LNG facility and domestic customers.

In 2022, Neptune’s Norway business accounted for 58kboed of “low cost and low emission” production, of which 57 percent was gas or LNG.

Also, Neptune’s principal assets in the country include the Snohvit field in the Barents Sea, which supplies Equinor’s Hammerfest LNG terminal.

Neptune Energy Norge owns 12 percent in Snohvit.

Eni’s CEO Claudio Descalzi said this transaction delivers to the company a “high-quality and low carbon intensity” portfolio with “exceptional” strategic and operational complementarity.

He also said that Eni sees gas as a “critical bridge energy source” in the global energy transition and the company plans to increase the share of its natural gas production to 60 percent by 2030.

Neptune will contribute predominantly gas resources to Eni’s portfolio.

Moreover, the geographic and operational overlap “is striking, adding scale to Eni’s majority-owned Var Energi; bringing more gas production and CCUS opportunities to the remaining North Sea footprint; building on Eni’s leading position in Algeria – a key supplier to European gas markets; and deepening Eni’s presence in offshore Indonesia, supplying the Bontang LNG plant and domestic markets,” he said.

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