GDF Suez Is in Talks to Buy Dutch Offshore Assets

By Tara Patel

Sept. 5 (Bloomberg) -- GDF Suez SA, operator of Europe's largest natural gas network, is in exclusive talks to buy 1.08 billion euros ($1.5 billion) of offshore and pipeline assets from Nederlandse Aardolie Maatschappij BV, to become the largest operator in the Dutch part of the North Sea.

The assets cover exploration, production and transportation of oil and natural gas, including working interests of 30 to 60 percent in five producing wells, participation in the Dutch section of a pipeline and ``very promising exploration potential,'' Paris-based GDF Suez said today in a statement.

The wells currently produce about 3.3 million barrels of oil equivalent a year, the company said. Nederlandse Aardolie Maatschappij, also known as NAM, is a joint venture of Royal Dutch Shell Plc and Exxon Mobil Corp. and is the operator of the Slochteren gas field, source of about half of Dutch production.

The acquisition, which still requires due diligence and regulatory approval, is part of GDF Suez's push to double gas reserves to 1.5 billion barrels of oil equivalent from 2006 levels, mainly through external growth.

Total SA agreed two days ago to buy Talisman Energy Inc.'s assets in the Dutch sector of the North Sea for $480 million. The purchase includes three field stakes with 2007 production equivalent to about 23 million cubic feet of natural gas a day.

`A Bit Expensive'

Compared with the Total agreement, the GDF Suez price ``looks a bit expensive,'' Meriem Kettani Salam, an analyst at Dresdner Kleinwort, said by telephone from London. ``This could relate to what is not discovered yet.''

The transaction would increase the company's medium-term resources in the Netherlands by 30 percent and make it an operator of two of the three major offshore pipelines in that country, according to Jean-Marie Dauger, executive vice president of GDF Suez in charge of global gas LNG.

``With this acquisition, GDF Suez reinforces its strong position in the Netherlands and becomes the largest exploration and production operator in the Dutch sector of the North Sea,'' he said in the statement.

The purchase would give GDF Suez a participatory interest in the Dutch section of the A6-F3 pipeline, which transports gas from the German part of the North Sea to the Nogat pipeline system and a 30 percent interest in Nogat BV, a company that owns and operations the gas transportation system.

GDF Suez was created last month through a merger of state- controlled Gaz de France SA and Suez SA.

To contact the reporters on this story: Tara Patel in Paris at Tpatel2@bloomberg.net