OMV acquires stake in Russian gas field

OMV acquires stake in Russian gas field

Mar 06, 2017
2 min read
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Austria’s OMV has signed an agreement to acquire a 24.9 per cent share in the Yuzhno Russkoye natural gas field located in Western Siberia from Uniper SE for US$1.8 billion.

The Yuzhno Russkoye field is one of the largest gas fields in Russia, situated in the Yamal- Nenets region. Current plateau production of the field amounts to 25 billion cubic meters per year.

The deal is set to close by the end of the year end but is subject to further conditions, including co-shareholder consent as well as merger control and foreign investment control clearance in Russia.

Rainer Seele, chief executive officer of OMV said: “The acquisition will build a new core area, Russia, in our Upstream portfolio adding 100,000 boe/d to OMV’s production. After closing, OMV will produce in total more than 400,000 boe/d. This transaction is fully compliant with the execution of our strategy and significantly reduces OMV’s production cost.”

The license will expire by the end of 2043. The gas from the field is the key resource for the Nord Stream pipeline which supplies Germany directly with Russian gas.

Johann Pleininger, OMV Board Member Upstream, added: “An important strategic rationale behind this transaction is the ability to replenish reserves. Yuzhno Russkoye becomes a major source of reserve replenishment in OMV’s portfolio. The transaction enables OMV to reach its strategic target of a 100 per cent reserves replacement rate for a period of around 5 years based on OMV’s 2016 production volume.”

OMV is entitled to dividends starting with the financial year 2017 and is expected to receive approximately $200 million per year mid-term.