Marathon bidders in blocks

Competition: for Marathon assets off Norway

Rumours were flying on Friday about the likely bidders for Marathon Oil’s assets off Norway with Lundin Petroleum and Repsol – and possibly home player Det Norske Oljeselskap – believed to be among the contenders.

The head of Oslo-based research firm Rystad Energy, Jarand Rystad, said at a presentation this week that Swedish independent Lundin was among a line-up of 10 bidders angling for the US independent’s portfolio, and he did not rule out possible participation by Asian players.

Spanish media reported that domestic oil company Repsol was poised to make a bid of €2 billion ($2.7 billion) for the assets - including the Alvheim, Volund, Boyla and Vilje fields - in a move to optimise its own portfolio.

Analyst Teodor Sveen Nilsen of Swedbank First Securities said the assets could also be attractive for Oslo-listed Det Norske to generate immediate production revenue to fill its coffers as it faces financing challenges on upcoming field projects, including the giant Johan Sverdrup scheme off Norway.

“We believe the company is one of the companies most likely to acquire some of Marathon’s production in Norway,” he said in a note, citing Det Norske’s “sub-optimal tax position” that has left it with tax losses.

Det Norske’s dominant owner Aker, led by billionaire industrialist Kjell Inge Rokke, recently said the company should look at its asset portfolio to improve its funding position, with an equity issue seen  as inevitable.

Nilsen said the acquisition of Marathon’s assets would, together with a share issue, postpone the company’s need to find additional cash by about a year while also reducing its funding requirement for Sverdrup.

The analyst believes Marathon is likely to announce a deal for the assets in mid-June after bids were submitted earlier this month.

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