IE 11 is not supported. For an optimal experience visit our site on another browser.

Kerr-McGee sells North Sea oil and gas assets

Danish shipping giant A.P. Moller-Maersk A/S said Monday it is buying the majority of Kerr-McGee Corp.'s North Sea oil assets for $2.95 billion.
/ Source: The Associated Press

Danish shipping giant A.P. Moller-Maersk A/S said Monday it is buying the majority of Kerr-McGee Corp.'s North Sea oil assets for $2.95 billion.

Britain's Centrica PLC is buying four other fields from Kerr-McGee for $566 million, the U.S.-based company said.

A.P. Moller said the assets it is taking over include the British North Sea activities operated by Kerr-McGee affiliates and will be paid for in cash.

A.P. Moller's subsidiary Maersk Olie og Gas, or MOG, will acquire interests in 10 oil and gas fields, five of those as operator, with a current total share of production of some 60,000 barrels of oil equivalent per day. In addition, a number of smaller oil and gas discoveries as well as an exploration portfolio will be acquired, A.P. Moller said.

The deal is subject to approval by British and EU authorities.

"With the acquired activities, Maersk Oil has established a good position for further growth in this region and elsewhere," said Thomas Thune Andersen, chief executive of MOG.

Kerr-McGee said its North Sea assets include reserves of 231 million barrels of oil equivalent, and produced a daily average of 78,000 barrels of oil equivalent during the second quarter of 2005, representing 21 percent of the company's total production during that period.

Oil equivalents measure the energy content rather than the volume of oil and natural gas.

The deals are expected to be completed early in the fourth quarter, the company said.

Kerr-McGee has been aggressively changing its business portfolio after coming under pressure from shareholders led by billionaire financier Carl Icahn, who charged that the company wasn't properly managed.

Earlier this year, Icahn dropped a bid to sit on the company's board after Kerr-McGee agreed to sell its chemical business and to spend $4 billion to repurchase 29 percent of its shares.

The A.P Moller-Maersk group operates the world's biggest container shipping company Maersk-Sealand, a shipyard in Denmark and holds the rights for oil and gas exploration in Denmark's North Sea continental shelf. The group also owns retail chains in Denmark, Germany and Poland.

Last month, the European Union and U.S. authorities approved the group's $2.78 billion bid for Dutch company Royal P&O Nedlloyd.