BUSINESS GROWTH STRATEGY: OMV to build up new exploration opportunities
OMV is taking the next step to expand its exploration business in Sub-Saharan Africa by entering an offshore exploration project in Namibia. This is the third major milestone to build up a significant exploration position in the region after acquiring interests in Madagascar and Gabon in 2013.
“OMV is well on track to position its assets into more high-return upstream projects. Therefore it is part of OMV’s strategy to build up new exploration opportunities also in the region of Sub-Saharan Africa. By achieving this third milestone in just over six months, OMV has once again demonstrated its ability to deliver on strategic objectives,” stated OMV CEO Gerhard Roiss.
The transaction involves the acquisition of a 65% interest in two exploration blocks by Murphy Luderitz Oil Co., Ltd. (Murphy) and OMV from the Brazilian company Cowan Petroleum. OMV will take 25% while Murphy will be the operator of the joint venture, with an interest of 40%. Cowan will retain 20% equity, with the remaining 15% held by the Namibian national oil company NAMCOR. The joint venture partners will conduct an extensive 3D seismic program starting in Q2 2014.
According to Jaap Huijskes, OMV Executive Board member responsible for Exploration and Production, “Offshore Namibia offers great exploration potential as it is largely unexplored, yet has all the elements of an effective hydrocarbon system. The transaction is fully in line with our growth strategy and our focus on the North Sea region, Black Sea and opportunities like these in Sub-Saharan Africa.”
Recently the Austrian company signed a farm-in agreement with Tullow, an exploration-led company that has been very successful in finding and developing new resources onshore and offshore Africa. This is the second second new project in the southeast African island nation after it took a 40% stake in Madagascar’s Grand Prix block from Canada’s Niko Resources last September.
Jaap Huijskes, OMV Executive Board member responsible for Exploration and Production: “It is part of OMV’s strategy to build up a new exploration business in the region of Sub-Saharan Africa. The first steps were taken with entries into offshore Madagascar and more recently Gabon and Namibia. We are delighted to announce another farm-in agreement, this time onshore Madagascar,” pointed out Jaap Huijskes. With this new deal, OMV is expanding its footprint in Madagascar to onshore exploration acreage of more than 14,000 km² and at the same time partnering with an important and experienced player in the African exploration business. As part of the ongoing exploration campaign in these permits, OMV will participate in additional 2D seismic acquisition in the Mandabe block and the drilling of the first well in the Berenty block. The transaction is subject to the approval of the Government of Madagascar.
Details on the agreement with Tullow include:
- OMV will acquire a 35% participating interest on Block 3109 (Mandabe) and Block 3111 (Berenty). Tullow will keep 65% and continue as operator.
- 2D seismic in Block 3109 to be shot in the course of 2014.
- First well in Block 3111 to be spud in Q1 2015.
With Group sales of EUR 42.42 bn and a workforce of around 27,000 employees in 2013, OMV Aktiengesellschaft is Austria’s largest listed industrial company. The Exploration and Production business segment has a strong base in Romania and Austria and a growing international portfolio. 2013 daily production stood at approx. 288,000 boe/d. In Gas and Power, OMV sold approximately 425 TWh of gas in 2013. OMV operates a gas pipeline network in Austria and gas storage facilities in Austria and Germany with a capacity of 2.6 bcm. In Refining and Marketing OMV has an annual refining capacity of 17.4 mn tonnes (excluding Bayernoil) and as of the end of 2013 approximately 4,200 filling stations in 11 countries including Turkey.