Thursday, Aug 14, 2008

(Adds stock split details.)

By Oliver Klaus

Of DOW JONES NEWSWIRES

DUBAI (Dow Jones)--BASF SE's (BAS.XE) oil and gas unit Wintershall Holding AG plans to explore for crude in the United Arab Emirates as part of a plan to challenge rival oil majors for access to Persian Gulf reserves, an official said.

Bernhard Schmidt, a board member, told Dow Jones Newswires in a recent interview that the German oil giant is discussing projects with Abu Dhabi's International Petroleum Investment Co., or IPIC, that could happen as early as 2009.

Wintershall, which has already signed a preliminary agreement with IPIC, plans for the Gulf region to "significantly" contribute to its revenues in the future, Schmidt said.

Wintershall is a relative newcomer to the Persian Gulf where it will have to scrap with the likes of Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. (XOM) and Total SA (12027.FR) for rare access to some of the world's largest oil deposits.

"When we enter a region, we enter to establish it as a core region," Schmidt said, speaking at the company headquarters in Kassel, 200 kilometers northeast of Frankfurt am Main.

Shares in BASF, the world's largest chemical maker, have taken a battering this year. Wintershall has provided one of the few bright spots. Still, the stock traded down 0.97% at EUR39.95 on Aug. 13.

The stock was trading at highs of more than EUR100 in January, before BASF decided to carry out a two-for-one stock split on June 27, having secured approval for the move at its annual shareholder meeting in April.

In Abu Dhabi, which accounts for almost all the U.A.E.'s crude production of about 2.6 million barrels a day, first announcements of joint activities with IPIC are "realistic" in 2009, he added.

"We're in the process of evaluating first opportunities, with focus on Abu Dhabi," Schmidt said. IPIC presently manages global energy investments worth about $13 billion for the Abu Dhabi government.

Wintershall lost out to U.S. oil major ConocoPhillips (COP) for Abu Dhabi's estimated $10 billion Shah sour gas development, considered one of the most complex projects in the Middle East.

The company also wants to participate in exploration and production projects in Qatar, Iraq and Egypt, Schmidt said.

Gulf Exposure

Wintershall, Germany's largest oil and gas company, with an estimated production of 120 million barrels of oil equivalent this year, is already involved in Libya but has little exposure in the Persian Gulf.

It lost its 5% stake in Dubai Petroleum Co., a consortium led by ConocoPhillips (COP), in 2006 after the Dubai government took over control of its offshore oil resources.

In Libya it has invested as much as $1.3 billion since 1958 and produces more than 120,000 barrels a day in the country, which holds Africa's largest proved oil reserves at 41.5 billion barrels.

"We had a presence in the region but we never really managed to do what we have achieved in Russia or Libya. Now is a good time," Schmidt said.

Last year, Wintershall spent EUR142 million on exploration and production and acquisitions in North Africa and the Middle East - compared with EUR250 million in Europe and EUR1.83 billion in Wintershall's core areas, Russia and the Caspian, where it works with Gazprom OAO (GAZP.RS).

Schmidt, who sits on Wintershall's board of five executive directors, wants this to increase as Wintershall aims to broaden its Mideast operations.

Limited Access

Restricted access to resources in Saudi Arabia and Kuwait has left oil firms seeking access elsewhere in Libya, Egypt, Iraq and Qatar where exploration and production sharing contracts are on offer.

In the Persian Gulf region Wintershall is only present Qatar where it's bidding for more contracts after winning two offshore concessions, block 3 and block 11, as operator.

"Block 3, which we were awarded last year, is in the evaluation phase. We have to do seismic now together with our partners Cosmo Energy and Pertamina. In block 11, we're following up on our appraisal work. We're also looking at other blocks," Schmidt said.

Wintershall is also eyeing an auction to develop eight oil and gas fields in Iraq, which sits on the world's third largest proven oil reserves at 115 billion barrels.

"We have been selected as one out of 35 companies given permission to be a qualified bidder and operator and we are evaluating the forthcoming bidding round, at the same time like all other companies we are monitoring the developments in the country," Schmidt said.

In Egypt, Wintershall has begun looking at opportunities "more diligently" as the North African state continues to offer new oil and gas concessions, Schmidt said.

According to Schmidt, Wintershall's wider Mideast plans could be supported through acquisitions to help build up its regional presence, with the backing from BASF.

"We continuously evaluate acquisition opportunities but we are very selective," he said, without providing further details.

-By Oliver Klaus, Dow Jones Newswires, +9714 364 4962 Oliver.Klaus@dowjones.com

Copyright (c) 2008 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

14-08-08 0957GMT