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    OMV, Gazprom Deepen Strategic Cooperation


Russian giant Gazprom and Austria’s OMV signed key documents in St Petersburg on April 1, including about their planned upstream asset swap.

by: Mark Smedley

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OMV, Gazprom Deepen Strategic Cooperation

Russian giant Gazprom and Austria’s OMV signed key documents April 1 in St Petersburg to further develop their strategic cooperation sketched out six months ago.

Among these, they signed a ‘Second Term Sheet’ regarding their planned asset swap. This specifies, among other things, the assets that OMV will offer Gazprom under the swap.

In September 2015, the two companies signed the main terms and conditions of the swap which, if completed, would enable OMV to acquire a 24.98% strategic stake in the project for developing Blocks 4A and 5A of the Achimov deposits at the Urengoi field in western Siberia.

The joint Gazprom/OMV statement did not state what assets OMV is offering. However, an OMV spokesman said they would include OMV assets offshore Norway and UK, though how many assets in each country, and what share of each asset, has yet to be decided.

OMV’s main interests offshore Norway include the existing Gullfaks and Gudrun fields (both oil and gas) plus the Aasta Hansteen (gas) and Edvard Grieg (oil) field developments.

Final negotiations on the details of the swap would be “in the course of 2016”, he added.

The April 1 accords also included an agreement for Gazprom Group to supply OMV with Russian export blend crude oil (Rebco) and light sweet West Siberian crude oil (Silco) during 2016 on free-on-board terms.

Finally there was an agreement about scientific & technical cooperation in fields to include gas production, transportation, processing, underground storage and sales, among others.

The OMV spokesman said such cooperation would be focused on R&D, rather than on developing commercial joint ventures in gas marketing and storage that were a characteristic of cooperation between Gazprom and BASF-Wintershall, where OMV chief Rainer Seele worked until mid-2015.

Gazprom CEO Alexei Miller and his OMV counterpart Rainer Seele signed the documents on April 1, witnessed by Russian energy minister Alexander Novak and – on behalf of OMV’s two core state shareholders Austrian finance minister Hans Joerg Schelling, and UAE energy minister Suhail Al Mazrouei. The three ministers’ presence is a sign of the significance, especially of the planned upstream swap.

Seele's previous employer Wintershall forged a major upstream asset swap with Gazprom in October 2015 that followed on even earlier ones.

Worth recalling is that, also last September, OMV joined Gazprom and four other companies in inking a shareholders agreement to build a 55bn m3 Nord Stream-2 subsea gas pipe in the Baltic, although a final investment decision remains to be taken and is contingent on political accords.

Austria first started importing Russian gas in 1968, the first west European country to do so, and OMV remains an important customer of Gazprom.

Gazprom CEO Miller said: "We are consistently moving toward our ambitious goals -- boosting Russian gas and oil supply to Europe and developing our companies’ R&D potential.”

OMV chief Seele added: "The documents signed today are an important milestone towards even closer cooperation in the future."


Mark Smedley