Equinor Boosts Sverdrup, Cuts Lundin Stake

Norwegian oil and gas giant Equinor is swapping a 16% interest in Sweden’s Lundin Petroleum for a $650mn cash payment and a 2.6% stake in Norway’s flagship Johan Sverdrup project.

Equinor said on July 7 it had agreed to sell the share package in Lundin back to the company for $1.56bn, and acquire the extra interest in Johan Sverdrup for $910mn. The deal, set for closure in the fourth quarter, will reduce Equinor’s share in Lundin to 4.9%, while increasing its control over Johan Sverdrup to 42.6%.

Equinor bought into Lundin three years ago as part of plans to expand its operations offshore Norway. According to the state-owned firm, its initial investment in the company cost an average Skr 121 ($12.7)/share, whereas the new deal valued its stock at Skr 266.5/share.

“Since 2016 we have more than doubled the value of our investment in Lundin,” Equinor CEO Eldar Saetre said in a statement. “This transaction gives us the opportunity to capitalise on this value creation, and at the same time increase our direct ownership in the Johan Sverdrup field.”

Johan Sverdrup is one of the largest oil and gas fields on Norway’s continental shelf, hosting 2.2-3.2bn barrels of oil equivalent. It is due to start up this November, with output reaching a first-stage plateau of 440,000 b/d. Lundin will be left with a 20% share in the venture after the deal with Equinor is wrapped up. Other shareholders include Petoro, Aker BP and Total.