The German chemical company BASF has engaged negotiations with the Luxembourg-based investment firm Letter One on the possible merger of their oil and gas affiliates, Wintershall (BASF) and DEA (Letter One), both headquartered in Germany. BASF should hold a majority stake in the combined oil and gas company and is considering an initial public offering (IPO) for the new company in the medium term.
Wintershall is a wholly-owned subsidiary of BASF and is Germany's largest crude oil producer. It is also also active in Russia, the Netherlands, Norway, Denmark, the United Kingdom, Argentina and in the Middle East (Qatar, Abu Dhabi and Libya) and involved in the Nord Stream gas pipeline project.
DEA (Deutsche Erdoel AG) owns oil and gas production facilities and concessions across Germany, Denmark, Norway and Egypt. It was a subsidiary of the RWE Group until 2014, when it was purchased by Letter One for about €5.1bn. DEA operates throughout the world and has 20% of its 2P reserves in Germany, most of which are located in the Mittelplatte field. In Germany, Letter One also operates large-scale underground storage facilities for natural gas.