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    OMV Petrom Exits Kazakhstan


The company entered Kazakhstan in 1998 but its output in the country has been falling for some years.

by: Joe Murphy

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Premium, Corporate, Exploration & Production, News By Country, Kazakhstan

OMV Petrom Exits Kazakhstan

OMV Petrom, the Romanian subsidiary of Austria's OMV, is set to divest all its assets in Kazakhstan to concentrate more on its Black Sea activities, the producer said on December 29.

The company has signed a deal to sell 100% of its Kom-Munai and Tasbulat Oil Corp subsidiaries to a private Kazakh business called Magnetic Oil, it said in a stock exchange filing. Kom-Munai operates the Komsomolskoye field while Tasbulat Oil controls the Tasbulat concession containing the Aktas, Tasbulat and Turkmenoil deposits. All of the assets are situated in Kazakhstan's western Mangistau region near the Caspian Sea.

OMV Petrom launched its search for a buyer for the fields in January, hiring US investment bank Jefferies to manage the sale. The fields produced 6,450 barrels of oil equivalent/day in 2019.

The transaction, which needs approval from Kazakh authorities, should close in the first half of 2021, OMV Petrom said. The company, partly owned by OMV and partly by the Romanian state, entered Kazakhstan in 1998. But its output in the country has been falling for some years. It has suffered operational setbacks at the Tasbulat fields, including pipeline leaks and unsuccessful drilling. Meanwhile a water injection programme at the Komsomolskoye field failed to deliver the expected oil volumes.

"The business has been stable, but no further in-country expansion has been realised in the last few years and OMV Petrom has decided to shift the focus of its international upstream business to the Black Sea," the company said.

OMV Petrom and its partner ExxonMobil operate the Neptun Deep block in the Romanian Black Sea, which holds a 84bn m3 gas discovery. But the pair have delayed taking a final investment decision, with OMV Petrom blaming poor government policies. Despite these difficulties, OMV Petrom acquired a 43% stake in the Han Asparuh block in Bulgaria waters next to Neptun Deep in September from its parent OMV. 

The company also won a tender in June to search for oil and gas in the Georgian Black Sea, but it is yet to negotiate a production-sharing contract.