OMV, Sapura Close JV Deal

Austria's OMV and Malaysia's Sapura Energy have closed the agreement, which was first announced in September 2018, to form a strategic partnership, OMV said February 1.

OMV Exploration & Production, a wholly-owned subsidiary of OMV, has bought a 50% stake of the issued share capital in a new joint venture company, which will be called SapuraOMV Upstream. 

OMV paid $540mn for its 50% interest in SapuraOMV Upstream. In addition, the parties agreed to an additional consideration of up to $85mn based on certain conditions, mainly linked to the resource volume in Block 30, Mexico, at the time the final investment decision is taken, OMV said.

Both parties have also agreed to refinance the existing inter-company debt of $350mn. The management of the partnership will be based in Malaysia and an equal number of representatives from both sides will sit on the board of directors. The new entity SapuraOMV Upstream will be fully consolidated in OMV’s financial statements, OMV said. 

Sapura Upstream, based in Malaysia, has production and development assets in shallow waters there, produced roughly 4.1 mn boe/yr from offshore peninsular Malaysia, and has two natural gas exploration and production blocks offshore Sarawak in a well-developed area with existing infrastructure.

Development of its SK408 gas fields is on track and first gas is expected in 2020 with a significant ramp-up in 2023. This would lead to an estimated total plateau production entitlement of some 21mn boe/yr (60,000 boe/d). In addition to its assets in Malaysia, Sapura Upstream also has access to exploration blocks in New Zealand, Australia and Mexico.