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Dutch energy suppliers North Sea Group (NSG) and Argos Oil have announced that they are discussing a merger which, if successful, would see the creation of the largest independent player in the North-West European market. The announcement was made by Ben Vree, CEO of NSG and Peter Goedvolk, CEO of Argos.

With more than 850 employees, a combined tank storage capacity of over 1.5 million cubic metres (cbm) and annual turnover of approximately € 10 billion, the proposed merger looks set to also include the bunkering activities of both companies.

NSG and Argos are strong in midstream and downstream activities (storage and transfer, blending and trading of oil products, bunkering of seagoing and inland vessels, distribution and sales of oil products and biofuels). According to a joint statement, the new company would be active throughout Western Europe; in the Netherlands, Belgium, Luxembourg, Germany, France and Switzerland. Outside Europe, the envisaged combined organisation would also be represented in Brazil, Singapore and China, among others.

Commenting on the development, Ben Vree said: "After the recent strategic reorientation, NSG has brought its core activities and future growth ambitions into sharper focus. It wants to become an integrated provider of logistic services in the energy field. Besides storage, transfer and distribution, these services include trading and bunkering activities for seagoing and inland ships. Sustainability also has a high priority at NSG. Merging with Argos will enable us to realise all our ambitions better and more quickly and will give us a platform for further growth."

Peter Goedvolk commented: “Both our ambitions and our operations fit in closely with NSG’s. We have been working for some time on expanding our operations in Western Europe and on increasing our storage activities, and are focusing on sustainable energy. "We believe that, in the rapidly-consolidating energy market, joining forces with NSG is an important step in the right direction towards realising our growth plans. We hope to be able to conclude the merger talks in the fourth quarter of 2011, so that we will become a fully integrated company with a clear vision of the future."

Over the next few months, plans for integration and realising further synergies will be worked out, the companies said.

Because of a difference of opinion about the long-term growth strategy of NSG, the Van der Sluijs family has decided to sell its share in NSG to the other shareholders, Reggeborgh, Atlas Invest and Romo Holding.

In line with its strategic focus, NSG has decided to dispose of its inland shipping activities Interstream Barging (ISB). NSG will sell 70% of the shares in ISB's inland shipping activities to the Van der Sluijs family before the intended merger with Argos. NSG will retain a 30 percent strategic minority interest in ISB in order to guarantee the availability of the fleet.