OMV and Gazprom Agree Price on Achimov Acquisition

Gazprom and OMV announced June 7 that they have signed off on amended agreement setting a price for the Austrian company’s purchase of a stake in Russian upstream assets.

The amendment updates a “basic sale agreement’ signed in October for a a 24.98% interest in the Achimov IV and V phase development of the Urengoi gas and condensate field in the Nadym-Pur-Taz region in Western Siberia.

The October deal agreed "for a purchase price to be negotiated in good faith," OMV said at the time. The amendment sets out a price of €905mn ($1.02bn).

Execution of the deal must still be approved by company and regulatory bodies. The signing of the final transaction documents is expected to take place by the end of 2019, OMV said in its latest statement.

The deal in October came as the pair dropped plans for an asset swap. Norway blocked the plan as it objected to allowing Gazprom take over OMV assets in its upstream segment.

Gazprom CEO Alexei Miller said at the time: “We will sign the final document in 2019, and the development of Blocks 4A and 5A is planned until 2069. This means that we have another 50 years of fruitful work ahead of us.”

The Urengoy field is Russia’s largest gas and condensate field and one of the biggest gas fields in the world, extending over 12,000 km². The acquisition would add about 600mn boe to OMV’s reserves, representing OMV’s share of production in Achimov 4A/5A until the end of the year 2044.

The operator expects production to start at the end of 2020. OMV’s share of total investments is expected to amount to some €950mn by the end of 2044.