European Megadeal Sees Eni Buying Neptune Energy for $4.9 Billion

The all-cash deal aims to strengthen the Italian supermajor's role as a key supplier of gas to European markets.

Gjøa semisubmersible.
The Neptune Energy-operated Gjøa platform in the Norwegian North Sea.
Source: Neptune Energy

Eni announced on Friday that, in partnership with Vår Energi, it has agreed to buy privately held Neptune Energy for $4.9 billion.

The all-cash deal marks the biggest European oil and gas sector acquisition made in several years and will split Neptune’s mostly gas-focused assets between the two companies.

Vår, Eni’s 63%-owned Norwegian subsidiary, will acquire Neptune’s Norwegian business, which includes interest in 12 fields, for $2.3 billion. For a sum of $2.6 billion, Eni will take over the remainder of the portfolio that includes operator and nonoperator interests in the UK, Netherlands, Algeria, Egypt, Indonesia, and Australia.

London-based Neptune was founded in 2015 and is owned by the China Investment Corporation. Neptune said in a release that it will retain its German business.

The Italian supermajor said in a statement that the deal “complements Eni’s key areas of geographic focus and supports its objective of increasing the share of natural gas production to 60% and reaching net zero emissions (Scope 1+2) from the upstream business by 2030.”

Eni said it expects to see $500 million in general and administrative and industrial synergies as a result of the deal. The company added in its statement that the acquisition will boost annual European gas supplies by 4 billion m3.

Neptune reports its production this year is averaging at near 130,000 BOE/D. The transaction involves reserves estimated to be about 484 million BOE, which Eni said is 80% weighted toward gas. Pending regulatory approvals, the deal is expected to close in the first quarter of next year.

Other major deals involving the European upstream market made in recent years include the 2021 merger between Premier Oil and Chysaor, which resulted in the formation of Harbour Energy. In 2017, French supermajor TotalEnergies announced a $7.45 billion stock-and-debt deal to acquire Denmark’s Maersk Oil.