Norsk Hydro out of Scanraff

September 18, 2003, 11:00 CEST

Norsk Hydro has agreed to sell its 25 percent share in the Scanraff oil refinery at Lysekil, Sweden, to the oil company Preem, which already owns the remaining 75 percent of the refinery. Scanraff is the largest refinery in the Nordic region and one of the most modern in Europe, with an annual processing capacity of 10 million tonnes.

The sales proceeds from Hydro's share in Scanraff are approximately NOK 1.4 billion, inclusive of debt transfer. In addition, Preem will assume the inventory relating to the refinery operations at market price, valued at the transaction date.

The transaction is expected to reduce the capital employed in the segment by approximately NOK 1.8 billion, according to a press release from Norsk Hydro.
The deal is expected to be concluded in the course of the fourth quarter of this year, pending approval from the authorities. The transaction is expected to result in a profit for Hydro of approximately NOK 600 million. There will be no tax effect for Hydro.
After the sale, Hydro will no longer hold an ownership interest in the refining business. Hydro will meet the requirement for refined products for its Swedish retail marketing by means of a long-term supply agreement signed with Preem.
Following the VAW acquisition in 2002, Hydro announced a NOK 10 billion divestment programme to be completed by the end of 2003. With the agreement to sell the Scanraff interest, divestments have been completed or agreements to divest entered into - amounting to a total of approximately NOK 9 billion.