Norwegian oil and gas group Vaar Energi plans Oslo IPO

Vaar Energi, one of Norway’s biggest oil and gas producers, is planning a stock market listing in a rare recent test of investor appetite for petroleum IPOs.

The company, owned by Italian oil group Eni and Norwegian private equity group HitecVision, said it would list in Oslo and also raise capital through two private placements.

Analysts value the company, the third-biggest oil producer in Norway behind state-controlled Equinor and Petoro, at about $10bn-$15bn, based on the $11bn valuation of its nearest independent equivalent, Aker BP. Vaar Energi had average production of 247,000 barrels per day during the third quarter, ahead of Aker BP’s 210,000.

“We believe oil and gas will continue to be part of the energy mix for decades to come, and the current gas market developments in Europe confirm our view that a reliable and safe supply of natural gas from Norway to Europe will be crucial,” said chief executive Torger Roed.

Norway is western Europe’s biggest oil and gas producer and there has been plenty of consolidation in recent years as majors such as Chevron and ExxonMobil have left and the likes of Vaar Energi and Aker BP have gobbled up assets.

But several petroleum IPOs have struggled in the past few years as investors place more weight on sustainability even as oil prices have increased in recent months, hitting their highest ever level measured in Norwegian krone last week.

Vaar Energi aims to have no carbon emissions in its own production by 2030 as Norway looks to electrify its oil platforms, which currently use gas turbines for power. It is also looking to boost its production to 350,000 b/d by 2025.

The group, 70 per cent owned by Eni with the rest owned by HitecVision, has talked to institutional investors since announcing an IPO was a possibility in October. Eni intends to remain the majority shareholder after the listing.

“The Norwegian Continental Shelf will remain one of the most attractive regions for exploration and production globally due to cost competitiveness, a stable regulatory environment and low emissions. With a robust and diversified portfolio of operations and assets across all parts of the NCS, we have set ambitious growth targets,” said Roed.

Vaar Energi was awarded 10 new licences in Norway last week in a concession round that was much criticised by environmentalists and leftwing parties in Oslo after the International Energy Agency said no new oil and gasfields should be developed if the world is to meet climate targets.

DNB, JPMorgan, Morgan Stanley and Sparebank 1 are acting as joint global coordinators for the IPO.

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