• 5 minutes Mike Shellman's musings on "Cartoon of the Week"
  • 11 minutes Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 12 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 1 min Pakistan: "Heart" Of Terrorism and Global Threat
  • 1 day Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 5 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 5 hours Venezuela set to raise gasoline prices to international levels.
  • 1 day Batteries Could Be a Small Dotcom-Style Bubble
  • 58 mins Renewable Energy Could "Effectively Be Free" by 2030
  • 17 hours Saudi Fund Wants to Take Tesla Private?
  • 1 day Starvation, horror in Venezuela
  • 18 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 1 day France Will Close All Coal Fired Power Stations By 2021
  • 1 day Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 10 hours Corporations Are Buying More Renewables Than Ever
Keystone XL Delayed…Again

Keystone XL Delayed…Again

The Keystone XL saga has…

Shale Profits Remain Elusive

Shale Profits Remain Elusive

Despite higher oil prices, U.S…

OMV Buys Uniper Stake In Giant Russian Gas Field For $1.85B

OMV Buys Uniper Stake In Giant Russian Gas Field For $1.85B

Austria’s OMV is buying the 25-percent stake of Germany’s Uniper in Russian gas field Yuzhno-Russkoye in western Siberia for US$1.85 billion in a deal that would give the Austrian energy group access to a major upstream project in Russia, and help the German company cut its debt.

OMV will buy Uniper’s interests in two Russian companies - OJSC Severneftegazprom and JSC Gazprom YRGM Development - that own 25 percent in the Yuzhno-Russkoye field. The deal, subject to regulatory clearance in Russia and approval by the other shareholders, is expected to close by the end of this year and will take effect retroactively as of January 1, 2017, the two companies said in separate statements on Sunday.

OMV’s share of the remaining recoverable reserves during the license term for Yuzhno-Russkoye until the end of 2043 is around 580 million barrels of oil equivalents (boe). The Austrian company’s share of the daily production of the field is estimated at 100,000 boed. The current plateau production of the field is 25 billion cubic meters (882.9 billion cubic feet) annually, OMV said.

The transaction enables OMV to reach its strategic target of a 100% reserves replacement rate for a period of around 5 years based on OMV’s 2016 production volume,” OMV Board Member Upstream, Johann Pleininger, said.

Related: Is The U.S. Becoming Overdependent On Natural Gas?

Via the deal, OMV will generate cash flows without requiring significant investments, with capex needs expected at US$20 million annually until license expiry. OMV is entitled to dividends starting with the financial year 2017 and is expected to receive approximately US$200 million per year mid-term, the Austrian group said.

Uniper, for its part, said that the sale would not affect its strategy, as the E&P business was no longer considered a core business.

In addition, the sale of the Yuzhno-Russkoye stake would help Uniper “achieve our deleveraging target well ahead of schedule”.

Uniper’s target is to generate positive free cash from operations after dividend payment and to sell assets for US$2.121 billion (2 billion euro) to reduce its economic net debt/EBITDA ratio to “comfortably below 2.0x.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News