OMV, Gazprom Agree Basic Swap Terms

Austrian producer OMV and Russian monopoly Gazprom have agreed the elements of a cash-free asset swap transaction, but not yet signed the agreement, OMV said December 14, and that is expected to happen today.

OMV acquires a 24.98% interest in the Achimov IV and V phase development in the Urengoy gas and condensate field, adding some 560mn barrels of oil equivalent reserves, and Gazprom acquires a 38.5% stake in OMV Norway. The swap transaction is envisaged to be cash free except for potential customary closing adjustment payments. The effective date of the transaction is January 1, 2017

The execution and performance of the swap transaction is subject to the agreement on the final transaction documents, regulatory and further corporate approvals and the signing of the final transaction documents is expected by mid of 2017.

Achimov production is expected to start up in 2019 and to reach a plateau of more than 80,000 boe/day in 2025 net to OMV. OMV would likely have to to spend €0.9bn from 2017 to 2039.

OMV's Norwegian portfolio consists of a total of 32 licenses of which five are operated by OMV. The production in the first 9 months of 2016 amounted to 67,000 boe/day. The minority stake might satisfy Norwegian concerns about Gazprom having an equity position, as Norwegian press has reported. 

William Powell