Austria, Russia Delay Achimov Stake Deal
Austrian OMV and Gazprom have further amended their basic sale agreement of October 3 2018, relating to the transfer to OMV of a quarter of two undeveloped Achimov-layer blocks at Russia's Urengoi gas field. The amendment agreement means that the negotiation phase for the final transaction documents will be extended to June 2022 and on a non-exclusive basis, OMV said March 6.
"In these negotiations, material developments and changed circumstances until signing thereof – including the planned start of production of Achimov 4A/5A – are to be taken into account by the parties in good faith, in particular in relation to the economic effective date and the purchase price," OMV said in its statement.
A company representative told NGW that: "The extension gives both partners more time for negotiations and more flexibility in the execution of the transaction." OMV cannot comment on whether any other parties are interested in the project, the representative said.
Last June, the parties announced they had reached an agreement in principle, setting a price of €905mn ($1.01bn) for a 24.98% stake in the western Siberian assets. But execution of the deal had to be approved by company and regulatory bodies, which was then expected by the end of that year. That agreement was the original amendment to the basic agreement, which envisaged a swap whereby OMV would transfer North Sea production assets to Gazprom. But this was blocked by the Norwegian government, making a sale the only alternative.
The Urengoi gas field, one of the world's largest, entered production in the late 1970s and is now mature. Gazprom wants to develop the field's Achimov layer, at a depth of around 4,000 metres, in order to boost yields.
Gazprom has divided the field's Achimov reservoirs into five blocks. The company is partnered with Germany's Wintershall Dea at the 1A block, where output recently reached 10bn m3/yr, whereas it is producing gas at the 2A block on its own. 3A, 4A and 5A remain undeveloped, but Gazprom in 2015 sold 25% stakes in 4A and 5A to Wintershall.
Gazprom has not said when it expects first gas from 4A and 5A, nor their expected output. However, production from all five blocks is expected to total 36.8bn m3/yr at full capacity, according to the company's website.