E.ON Says Has Agreed To Adjust Terms Of Gas Purchase Deals With Statoil
March 14 2012 - 4:20AM
Dow Jones News
E.ON AG (EOAN.XE) said Wednesday it has reached an agreement
with Norwegian natural gas producer Statoil ASA (STO) to readjust
the commercial terms of long-term, oil-indexed gas contracts that
account for around 25% of the German utility's gas portfolio.
The purchase prices of the gas it acquires from Statoil have
been brought down to market level, said E.ON without further
elaborating on the expected impact of that agreement on its
earnings in 2012.
The company earlier Wednesday said it posted its first ever net
loss in 2011 due partially to its loss-making wholesale gas
business, where procurement prices that are linked to the price of
oil far exceed selling prices in an oversupplied European
market.
The disconnect between high procurement prices and low selling
prices has been putting the company's wholesale gas business under
enormous pressure and its gas supply and sales business recorded a
loss of around EUR700 million, E.ON said.
The agreement with Statoil marks a major step forward for E.ON,
which now has renegotiated some 65% of its gas procurement
contracts with producers.
However, talks with Russia's Gazprom OAO (GAZP.RS)--which
supplies around 35% of E.ON's gas portfolio--are ongoing, E.ON
said.
Chief Executive Johannes Teyssen said that E.ON still expects to
bring all of its long-term gas supply contracts to a "competitive
level" by 2013.
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com
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