Mr. Wieland, how much progress has been made in the merger between Wintershall and DEA Deutsche Erd??l AG that was announced in the early fall?
The merger agreements have been signed and the external approval procedures are now underway. We expect them to be completed in the first half of 2019. We???ll then be the biggest independent oil and gas producer from Europe. And one with growth projects worldwide in our pipeline.
What are they?
We???re expanding production in Russia, for example. We???ve cooperated with Gazprom in Siberia for 15 years and are successfully producing natural gas there. We are currently developing a further gas field there. We are moving forward with the Nova project in Norway and assessing the potential of unconventionals in Argentina. For its part, DEA will contribute highly promising activities, such as in Egypt, to the merger.
The price of oil rose for a long time, but has now dropped sharply in a short space of time, which is also hitting the gas market significantly. How will that impact Wintershall?
Our projects are not dependent on the current price, but have to be profitable in various scenarios, alone on account of the volatility of prices, but also because of the projects??? long-term nature. For instance, we embarked on the ???Maria??? oil field project in Norway when the price of oil was at a low.
An LNG terminal is to be built soon in Germany so that liquefied natural gas can be imported. You???re against that. Why???
We???re certainly not against it. We just don???t want to participate in it. That???s because there are already enough terminals in Western Europe that aren???t working at full capacity. And the some like in the Benelux countries are so near that Germany could be supplied well from them. But we don???t believe that LNG can compete with pipeline gas.
Tell that to Donald Trump, who is hell bent on selling American LNG to Europe.
Generally speaking, diversification is always welcome and the free capacities required for that are available. But in particular LNG from the U.S. is too expensive at the moment to stand a chance against cheaper pipeline gas. That???s why we???re skeptical.
There???s relentless criticism about the Baltic Sea pipeline Nord Stream 2, in which Wintershall has a financial stake.
We view the pipeline from a purely economic perspective. Look at the key data: Production in Europe is falling, due, for instance, to the closure of the largest Dutch gas field in Groningen. At the same time, demand for gas will remain at around the same level in the coming years. It???s forecast that 400 billion cubic meters of natural gas will need to be imported in 2030.
And only Russian gas can meet that demand? What about Norway, North Africa and the Caspian Sea region?
These regions, in which we also operate, are all important to establish a broad base for the imports we need. They play a role in supplying Europe. But when you look at the map, you see that the Baltic Sea pipeline is the shortest and hence most economical route to transport large quantities of gas. Its ecological footprint is also smaller as a result of the short distances, but also because we can compress gas more strongly in underwater pipelines than on land.