Norway's Norsk Hydro and Statoil have agreed to merge the two groups' oil and gas activities, the companies said today.
The new company will have combined production of 1.9 million barrels per day in 2007 and proven oil and gas reserves of 6.3 billion barrels of oil equivalents, and it will become the world's largest offshore operator, the companies said.
"The recommended merger is driven by an ambition to grow in Norway and internationally," Norway's two biggest companies said in a joint statement. The companies' shareholders will be asked to approve the deal.
Norsk Hydro, the energy and aluminium group, will continue as a leading, focused global aluminium company, Hydro said. Hydro shareholders will hold 32.7 per cent, and Statoil's shareholders would hold 67.3 per cent of the new company.
The Norwegian government will raise its stake in the new company to 67 per cent from an initial 62.5 per cent, the government said in a statement.
Norsk Hydro will remain a separate listed company based on its aluminium and power generating business, the government said. "This creates the basis for an even further development of the aluminium business," the government said.
Statoil chief executive Helge Lund will become CEO of the new company, and Norsk Hydro's chief executive Eivind Reiten will become chairman.