OMV Completes Russian Gas Field Deal

Austrian OMV has bought Uniper's 24.99% stake in the northern Russian Yuzhnoe Russkoe field, following fulfillment of all closing conditions including regulatory and co-shareholder approvals, it said December 1. The deal lowers the company's average production costs and adds some 580mn barrels of oil equivalent to its reserves, OMV said. 

OMV paid the German company €1.719bn ($2.05bn) and includes customary closing adjustments. The transaction takes retroactive economic effect as of January 1, 2017 and was largely funded out of proceeds generated from disposals and OMV’s strong cash flow, it said.

OMV CEO Rainer Seele said the deal was "a further milestone in OMV´s successful delivery on its corporate strategy to establish Russia as a new core region of OMV. Our stake in Yuzhno Russkoye adds 100,000 boe/d to OMV´s production. This boosts OMV´s total production to more than 430,000 boe/d.”

Nord Stream ties

The Yuzhno Russkoye field is one of the largest gas fields in Russia, situated in the Yamal-Nenets region. Current plateau production of the field amounts to 25bn m³/yr. Gazprom named it as a source of the gas for the Nord Stream pipeline, of which so far only the first unit, with 55bn m³/yr, is operational.

Gazprom said November 30 it had shipped its 200th billion cubic meter through NS 1, not adding that it would have shipped a lot more than that by then, if it had been allowed to use the line at full capacity since it started up. The second line is due to start up in late 2019, although there are questions over whether that is achievable.

The NS2 consortium had expected the Danish parliament to amend the law on the continental shelf, which it did November 30. This would enable it to exclude NS2 from its waters, even though NS1 crosses them and has not had any operational difficulties.

OMV and Uniper are both 10% financiers of Nord Stream 2. The field licence runs until the end of 2043.