BASF says asset swap with Gazprom off
German chemicals giant BASF said Thursday it had agreed with Russian energy firm Gazprom to abandon a swap of certain strategic assets that would have bolstered its natural gas production.
"We regret that the asset swap will not be concluded," BASF CEO Kurt Bock said in a statement, adding the company would continue its over 20 years of cooperation with Gazprom through their existing joint ventures.
The statement did not state why the swap was being abandoned, and Bock said BASF would continue with its strategy of pursuing profitable growth of energy assets in various regions.
The swap deal announced in 2012 would have seen BASF's subsidiary Wintershall obtain shares in a western Siberian gas field.
In exchange it would hand over its stake in their joint venture gas storage and trading business, plus a stake in an oil and gas exploration unit in the North Sea, that together brought in 12 billion euros ($16 billion) in sales in 2013 and generated about 500 million in operating earnings.
Dropping the swap will require BASF to book 324 million euros for depreciation and equity value changes for 2013 and 2014.
Nevertheless, Bock said the outlook for achieving the target of an operating profit before special items that is slightly higher than last year "still appears to be reachable".
© 2014 AFP