Amerada Hess agreed to buy gas and power marketer Statoil EnergyServices Inc. of Alexandria, VA. Statoil serves industrial andcommercial customers, mainly in New York, Pennsylvania, Maryland,Virginia and Washington, D.C.

The deal is intended to expand Hess’ customer base andstrengthen its position as an independent energy marketer, thecompany said. “The combination of Statoil’s electricitycapabilities with Hess’ expertise and experience in fuel oil andnatural gas will make Hess one of the only total energy providersof fuel oil, natural gas and electricity on the East Coast,” Hesssaid in a brief statement, which did not reveal terms of the deal.The purchase is expected to close in the first quarter. NeitherHess nor Statoil returned multiple calls for comment. An industryobserver said the deal should bolster Hess’ back officeadministration.

Last month Statoil Energy agreed to sell its Appalachian Basin gasexploration and production subsidiaries, Eastern States ExplorationCo. and Eastern States Oil and Gas, for $630 million to EquitableResources Inc. (see Daily GPI,Jan. 5). The deal combines Pittsburgh, PA-based Equitable’s 930Bcfe of reserves and 6,100 wells with Statoil’s 1.1 Tcf of reservesand 6,500 wells. Statoil was the largest reserve holder in theAppalachian Basin. The wells are in Kentucky, West Virginia,Pennsylvania and Ohio.

Statoil Energy was put on the auction block in October (see DailyGPI, Oct 15). The company’s parent,Norwegian government-owned Statoil Group, hired Credit Suisse FirstBoston for the divestiture. “In order to effectively execute itsbusiness plan, Statoil Energy needs to substantially increase thescale of its operations,” said Statoil Group Executive Vice PresidentJohan Nic Vold at the time. “The resources required to achieve suchscale cannot realistically be supplied by the Statoil Group alone asthere are numerous international investment opportunities competingfor our limited capital.”

About five months before Statoil Energy hung up the for salesign the company said it was looking for a partner to bolster itsresource base. “Our parent group, Statoil, has invested $700million in Statoil Energy,” a spokesman said at the time. “Thesearch has been misconstrued as a selling of interest. Statoil isnot looking for someone to come buy $350 million of the company.They are searching for someone to come in and add to what alreadyexists.”

Statoil Energy was founded in 1981 and evolved from a small gasexploration and production company to a full-service energy companywith 1998 revenue exceeding $3.5 billion. It traded 600 Bcf of gasper year as of 1998 and supplied 100 Bcf/year of retail gas. Thecompany also sold 66 million MWh of electricity per year and ranked11th in U.S. electricity trading.

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