Gazprom in Complex Asset Swap Transaction with BASF/Wintershall

December 23, 2013

Cleary Gottlieb represented Gazprom in a complex asset swap transaction with Wintershall, a subsidiary of BASF, pursuant to which Wintershall will receive 25% plus one share in the development of blocks IV and V of the Achimov formation of the Urengoy gas field in Western Siberia, while Gazprom will (i) increase its participation from the current 50% to 100% in the gas trading and storage companies of the WINGAS group (including gas storage facilities in Rehden and Jemgum, Germany and Haidach, Austria) and in the gas trading companies WIEH (Wintershall Erdgashandelshaus Berlin) and WIEE (Wintershall Erdgashandelshaus Zug), and (ii) acquire 50% of Wintershall Noordzee B.V., a company engaged in the exploration and production of oil and gas in the southern North Sea. The total value of swapped assets is approximately $2 billion.

On December 23, 2013, the parties signed a principal swap agreement which sets out the final conditions of the asset swap. Earlier, in November 2012, the parties signed a basic swap agreement which set forth the base principles of the transaction. The parties expect to complete the transaction in the course of 2014.

Cleary Gottlieb advised Gazprom on EU merger control and regulatory aspects of the transaction. The firm secured clearance in Phase I.

Gazprom, with annual sales of over $150 billion, is Russia’s second largest company and the world’s largest producer of natural gas. It is majority owned by the Russian state, and its shares are listed in Moscow and its ADRs in London.

Wintershall is a wholly-owned subsidiary of BASF, the largest diversified chemical company in the world, which is headquartered in Germany, and has been active in the exploration and production of crude oil and natural gas for over 80 years.

Blocks IV and V of the Achimov formation of the Urengoy gas field have total estimated hydrocarbon resources of 274 billion cubic meters of natural gas and 74 million metric tons of condensate (this is equivalent to a total of 2.4 billion barrel of oil equivalent).

WINGAS is one of the largest natural gas traders on the German market. Moreover, it has supplied customers in Belgium, the Netherlands, Denmark, France, the UK, Austria and the Czech Republic for many years. WIEH also supplies natural gas to German customers, while WIEE supplies customers in Romania and Bulgaria and helps to develop infrastructure in the south-east European markets. Astora GmbH & Co. KG, a subsidiary of Wingas, is one of the largest marketers of natural gas storage capacities in Europe. Wintershall Noordzee B.V. is one of the largest producers of natural gas in the Netherlands, which is also active in the exploration and production of oil and gas in UK and Denmark, participating in over 70 licenses in total.