MOSCOW. Sept 13 (Interfax) - The Norwegian elections have slowed down the approval of a deal between OMV and Gazprom (MOEX: GAZP), and the Austrian company is waiting for a government to be formed in order for the deal to be approved, OMV CEO Rainer Seele told journalists.
Gazprom plans to develop OMV's fields in the North Sea via an acquisition of 38.5% of OMV (Norge) in exchange for the Austrian company receiving a 24.98% stake to develop the fourth and fifth sections of Achimov deposits of the Urengoy field.
"We've determined the closure of the deal not later than the end of next year, because the approvals processes in both countries, Russia and Norway, are fairly lengthy. It'll be quicker for Yuzhno-Russkoye, because there we are receiving the stake from a foreign partner. At the Achim 4 and 5 blocks we are receiving the stake form Gazprom, which is a different approvals process. Now we're waiting for the process to begin in Norway," Seele said.
"We need to discuss with Gazprom the shareholders agreement, which will determine what corporate governance we will use. We anticipate a short delay due to the Norwegian elections on Monday. We have to wait and see who the energy minister will be. Realistically we'll be able to begin the approvals process in Norway in November," he said.
Asked whether sanctions would affect the deal, Seele said: "No. We have of course carried out all the legal checks, of all the paperwork that is on the table. If we're talking about out investments in gas production in Russia - Achim 4 and 5, Yuzhno-Russkoye, at first sight we see no negative effect, so we'll be continuing work on these two projects," he said.
Gazprom Neft (MOEX: SIBN) will take a stake in OMV's Norwegian assets in the course of the deal with its parent company Gazprom (MOEX: GAZP), Vsevolod Cherepanov, a member of the Russian gas giant's management board, told reporters in June. "The OMV asset will be for Gazprom Neft. It's an oil asset," Cherepanov said.
Austria's OMV signed an outline deal with Gazprom at the end of last year under which OMV may receive a 24.98% stake in the development of the Urengoy field's Achimov deposits 4 and 5 in exchange for Gazprom receiving a 38.5% stake in OMV (Norge) AS, the company developing fields in the North Sea.
It was reported earlier that the Norwegian Oil Ministry demanded that Gazprom's stake in OMV Norge be restricted to 25%, in which case the remainder would be paid for by the Austrian company in cash. However, Gazprom managed to overcome this restriction.
"The Basic Agreement specifies the share that Gazprom will receive in the asset of OMV as part of the asset swap; it also contains some other commercial terms and is legally binding. In essence, the basic parameters of this deal have been determined. We plan to agree and sign the final documents by mid-2017," a Gazprom statement cited company chief Alexei Miller as saying in December.
"The signing of the Basic Agreement is a further milestone to foster the long-lasting partnership between OMV and Gazprom. With this, OMV laid the foundation to reach one of its most important strategic targets. The project will substantially increase our reserve base. We will identify further projects and opportunities with Gazprom to expand our cooperation," OMV's Seele said earlier.
Production is expected to start up in 2019 and to reach a plateau of more than 80,000 boe/day in 2025 (OMV's share of production). The deal will add about 560 million barrels of oil equivalent to OMV's reserves. OMV's stake in both investments will amount to about 900 million euros in 2017-2039.
OMG Norge's portfolio includes 32 licenses, and it is the operator for five of them. In the 9M 2016, production here was 67,000 barrels of oil equivalent a day.
This is a cash-free deal (with the exception of possible payments as part of an adjustment), and its effective date is considered January 1, 2017. The deal will be completed after agreement and signing of final documentation, and also the receipt of the needed regulatory and corporate approvals.
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