Norwegian oil company Statoil is to take over the oil and gas activities of Norsk Hydro and create new offshore production group. The new company will be 62.5% state-owned and will be given a new name, which was not disclosed.
Both companies' boards as well as the Norwegian government have approved the takeover, which is expected to be completed by the third quarter of 2007.
The merged entity will have a 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.
'This is the start of a new era. We are creating a global energy company and strengthening Norway's oil and gas industry,' Prime Minister Jens Stoltenberg said in a statement.
The state is expected to eventually raise its stake to 67%. Norsk Hydro will continue to operate as an aluminium company under its existing name. Norway is the world's third largest oil exporter, behind Russia and Saudi Arabia.
