SLB buying majority ownership in Norwegian carbon capture company

American oilfield services company SLB is acquiring majority ownership in Norwegian pure-play carbon capture company Aker Carbon Capture (ACC) as part of an agreement under which the two parties will combine their respective carbon capture businesses.

SLB will pay NOK 4.12 billion (around $379.4 million) in cash to purchase 80% of Aker Carbon Capture Holding AS (ACCH), which holds the business of ACC, and will contribute the SLB carbon capture business to the combined entity.

The U.S. company may also make additional payments of up to NOK 1.36 billion over the next three years based on the performance of the business.

The performance-based payments will be subject to the achievement of certain milestones, order intake and margin targets. The payments will be due when certain targets are met in the period 2025 to 2027, weighted towards the end of the period upon finalization of the financial statements for 2027.

ACCH will pay $50 million to purchase SLB’s carbon capture business.

The companies will combine technology portfolios, expertise and operations platforms to bring carbon capture solutions to market, with the combination set to leverage ACC’s commercial carbon capture product offering and SLB’s new technology developments and industrialization capability.

The transaction is subject to regulatory approvals and is expected to close by the end of the second quarter of 2024.

“For CCUS to have the expected impact on supporting global net-zero ambitions, it will need to scale up 100-200 times in less than three decades,” said Olivier Le Peuch, SLB’s CEO. “Crucial to this scale-up is the ability to lower capture costs, which often represent as much as 50-70% of the total spend of a CCUS project. We are excited to create this business with ACC to accelerate the deployment of carbon capture technologies that will shift the economics of carbon capture across high-emitting industrial sectors.”

The cooperation between ACC and SLB as shareholders of the combined business will be governed by a shareholders’ agreement. This will, among others, provide for board representation and certain other governance and minority protection rights for ACC, for SLB to finance the realization of the business plan by shareholder loans and for the possibility for ACC to sell its 20% stake in the combined business in the future. 

After a lock-up period of three years, ACC will be entitled to sell its stake in ACCH to SLB during a period of six months (put option). Conversely, SLB will after the expiry of the put option have a right to purchase ACC’s 20% stake in the combined business during the following six months (call option).

The shareholders’ agreement also has customary buy-out rights for both shareholders in the event of a change of control in the other shareholder.

“The decision to combine ACC and SLB’s carbon capture business is underpinned by a strategic vision that reflects our commitment to accelerate the industrial adoption of carbon capture,” said Egil Fagerland, CEO of ACC. “By partnering with SLB, we will become a diversified, global carbon capture player. Our combined suite of technologies and global reach will make a platform positioned to profitably scale faster, to the benefit of customers, employees and shareholders.”