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Wed 29 Jul 2009 11:14 AM

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Taqa subsidiary buys Dutch oil firm for $404m

Deal for three pipelines and 20 producing oil and gas fields in Dutch North Sea.

The Abu Dhabi National Energy Company’s (Taqa) subsidiary Taqa Energy is to buy Dutch oil and gas exploration and production firm DSM Energie Holding (DSM Energy) for $404m, the firm announced on Wednesday.

The acquisition from DSM Energy’s parent company, Royal DSM, includes non-operated interests in pipeline company Noordgastransport (NGT), three other pipelines and 20 producing oil and gas fields in the Dutch North Sea, it said in a statement.

Taqa will be provided with an additional daily production of around 5,000 barrels of oil equivalent, of which 85 percent is natural gas, the firm said.

DSM Energy said its total production in 2008 was the equivalent of 1.8 million barrels of oil.

Building on Taqa’s European operations formed a key pillar of Taqa’s strategy to create a diversified, global energy company, said Paul van Gelder, Taqa Energy managing director.

“The transaction we have announced today will increase our production and enhance our footprint in the North Sea, while generating low risk, stable cash flows,” he said.

Taqa’s interest in the NGT pipeline would establish the company as a key pan-European midstream player by complementing its existing portfolio, which included the development of the Bergermeer gas storage project in Holland, he added.

Taqa signed a deal in December 2008 with Russian energy giant Gazprom to jointly develop the storage facility, which will supply energy to Dutch and European consumers once operational.

The acquisition involving the purchase of 100 percent of the share capital of DSM Energy was expected to close in the third quarter of 2009, subject to regulatory approvals and notifications, it added.

DSM Energy, which holds a 40 percent stake in Noordgastransport, is a non-operator in the exploration and production of oil and gas on the Dutch Continental Shelf with stakes of up to 25 percent, in addition to its involvement in transporting oil and gas through its ownership of pipelines.

Royal DSM decided to sell its energy business because it did not fit with its operations in creating products and services within the fields of life sciences and materials sciences, it said in a separate statement.

DSM Energy, which employs six people, achieved sales of EUR161m ($228m) in 2008, it said.

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