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OMV closes in on PETRONAS

1. December 2010

In a bid to expand the company’s existing asset base and to further grow within its exploration and production core regions such as the Middle East, the Vienna-based oil and gas giant OMV has signed a sale and purchase agreement with PETRONAS International Corporation Limited. The Austrian Trade Commission reports this corporate deal

OMV has taken over Petronas International Corporation’s rights to explore and produce gas in Pakistan. OMV has signed a Sale and Purchase Agreement with PETRONAS International Corporation Limited (PETRONAS) on September 20, 2010 to acquire PETRONAS' oil and gas exploration and production interests in Pakistan
The purchase will increase OMV’s gas production in Pakistan to around 25,000 barrels of oil equivalent (BOE) a day by 2014, OMV said in a press release on Tuesday.
The Vienna-based oil and gas giant currently produces around 14,000 BOE a day in Pakistan and 318,000 BOE worldwide. The agreement includes the Mubarak, Mehar and Daphro exploration licences and the Mehar and Mubarak development and production leases.
“This corporate acquisition will expand OMV’s existing asset base and is a step towards reaching a critical mass in production in Pakistan,” said Jaap Huijskes, OMV executive board member responsible for exploration and production.
The closing of the deal is expected to take place within the next few months.
Petronas International Corporation Limited is a subsidiary of Malaysia’s national oil company Petronas. The company’s interests in Pakistan are mainly in the upstream, whereby the national oil company operates the Mubarak block, with ENI of Italy and Pakistan's Government Holdings Private Ltd (GHPL) as its partners.
Petronas also operates the Mehar block in Sindh Province, with Orient Petroleum Inc, Zaver Petroleum and GHPL as its partners. It also operates the Daphro block.
However, OMV is not new to acquisition as it acquired 41.58 per cent of Petrol Ofisi – Turkey’s leading company in the retail and commercial business – to further strengthen its leading position in the European market.
This announcement follows news that OMV has the highest-earning board members in Austria. A study by the investor protection group IVA found OMV’s six-member board received 10.2 million euros in 2009 after being paid 8.3 million euros in 2008.
For OMV, this transaction is in line with its corporate 3plus strategy to further grow within its exploration and production core regions such as the Middle East. OMV intends to invest further in Pakistan to ensure its position as the biggest foreign gas producer in the country.
( with inputs from Pakistani Newspaper, Business times)

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