Austrian based OMV, an integrated, international oil and gas company, has invested £1.7billion after purchasing Statoil’s share of two major North Sea developments.

 

OMV acquires 19% in the producing Gullfaks field and 24% in the Gudrun field; both oil and gas fields offshore the Norwegian Continental Shelf. In addition, OMV will take over 30% in Rosebank and 5.877% in Schiehallion, both fields located west of the Shetland Islands where OMV already holds a stake in. The agreement with Statoil also involves options for 11 exploration licenses.

An integral part of the transaction is a research and development partnership with Statoil to develop new technologies for the exploration of gas and oil from mature fields. OMV’s comprehensive expertise in onshore enhanced oil recovery is an ideal complement to Statoil’s experience in offshore enhanced oil recovery.

OMV CEO Gerhard Roiss: “The transaction will provide a huge boost to OMV’s strategy and will be a key factor in achieving our 2016 targets. It confirms OMV’s clear focus towards increasing the significance of its E&P activities. We are acquiring significant positions in developments lying at the heart of our North Sea growth region, the development capital will be largely funded by the operating cash flows of the already producing assets which are part of the portfolio whilst the purchase price represents a reinvestment of the proceeds we have generated from disposals and working capital reductions from our downstream divisions over the last 18 months.”

“Furthermore, the agreement to partner with Statoil on exploiting a number of exploration activities in the North Sea and West of Shetland area as well as the agreement to jointly work on enhanced oil recovery research adds both to our know how as well as the size of our exploitable asset base in the long term.”, says Roiss.

OMV is substantially increasing its reserves and strengthening its presence in stable OECD countries. This acquisition will see OMV’s 2P reserves (2P = proven and probable) increase by ca. 320 mn boe from the current levels of around 1.7 bn boe. Production is set to rise by 40 thousand boe/d by 2014 with a target increase to approx. 58 thousand boe/d by 2016. In the first half of 2013 OMV achieved a daily production of 299 thousand boe/d.

Helge Lund, President and CEO of Statoil: “The Norwegian continental shelf is a world class oil and gas region and Statoil is the largest operator. Over the past years we have delivered strong exploration results and we continue to increase the oil recovery from mature fields. Today’s transaction unlocks resources for continued investment in our core areas. OMV is a competent and experienced company and we are also pleased to extend our partnership on exploration opportunities and enhanced oil recovery technologies”.

Jaap Huijskes, OMV Executive Board Member responsible for Exploration and Production: “I am not only glad to see Norway and UK becoming a major contributor to our Exploration and Production portfolio but also to enter into a strategic partnership with Statoil, one of the most reputable offshore operators worldwide and number one player in Norway.”

The purchase price as per effective date January 1, 2021 amounts to USD 2.65 bn and is subject to customary adjustments for the year 2013 which are expected to be approximately USD 500 mn. For the recent Shetland/Lista discovery in the Gullfaks license, a contingent payment of USD 6 per boe for reserves to be developed has been agreed depending on the approval of the development plan.

The transaction will be largely funded out of the proceeds already generated by working capital reductions and disposals from OMV’s downstream business segments as well as the company’s excellent cash flow – in the first half 2013 OMV had a free cash flow of around EUR 1.6 bn - and existing credit lines.

Source - OMV

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