OMV to Buy 50% Stake in Malaysia's Sapura Upstream
Malaysian integrated oil and gas services provider Sapura Energy said September 12 it plans to sell 50% stake in its wholly-owned subsidiary Sapura Upstream to OMV.
It follows a pledge made by OMV CEO Rainer Seele to make Australasia into a new core region for the Austrian company.
The proposed transaction is based on an enterprise value for Sapura Upstream of $1.6bn. The two firms have agreed to continue negotiations on an exclusive basis.
“The partnership with OMV AG complements our continued strategy to grow our portfolio and expand our acreage position. OMV AG’s existing footprint offers new opportunities for our upstream segment and increases market reach for our services segment where OMV operates,” said Tan Sri Dato’ Seri Shahril Shamsuddin, Sapura Energy CEO.
“We have explored all options including the potential listing of our upstream business. The invitation to enter into this strategic partnership with a leading oil and gas player serves our goals and aspirations better while providing certainty in timing and valuation,” Shamsuddin added.
Sapura Energy is looking to strengthen its core businesses and finances. Last month the company said it will be raising ringgit 4bn ($970mn) via a rights issue. Sapura expects this partnership will sharpen its competitive advantage by leveraging on the strength of its portfolio of commercially viable gas fields offshore Sarawak and its acreage in new markets in New Zealand, Gulf of Mexico and most recently, Australia. In addition, OMV will benefit from Sapura Energy’s in-house capabilities, it said.
“The intended partnership with Sapura is a major step to develop OMV’s activities in South East Asia. The oil and gas demand in this region is expected to increase strongly until 2030 and OMV is taking the opportunity to further expand the business and build up the new core region”, said Rainer Seele, OMV CEO in a separate statement issued the same day.
In March, OMV bought all of Shell's New Zealand upstream assets. While announcing the New Zealand deal, Seele said “this acquisition is an important step to develop Australasia into a core region in line with our new strategy."