A medium-sized Norwegian producer, a private equity company, and an oil and gas trader are part of the offer made to the KURIER.
Speculation on the firms included in the Norwegian consortium seeking to acquire the majority of OMV’s oil and gas production has been rife for some weeks (E&P). It claims to be able to ensure Austria’s gas supply security.
The 3.5-page letter, dated July 25, addressed to Finance Minister Magnus Brunner, has been received by The KURIER. Alfred Stern, the head of OMV, had previously received an email with a smaller scope.
There are four participants in the collaboration.
Sverre Skogen, a long-time manager of Norwegian oil and gas, is in charge of the consortium. He currently serves as CEO of Mime, a fledgling business in Norway.
Over 35 million euros were sold by Mime last year.
Aker ASA + DNO, a holding firm listed on the Oslo Stock Exchange, is one of the other participants. Aker BP, a company that is also on the stock exchange, produces 650,000 barrels per day from six production facilities in Norway, making it somewhat bigger than OMV.
Additionally, “two excellent financial investors” with extensive E&P experience are on board, the letter claims. These include Transfiguration, one of the biggest commodity dealers in the world, and Bluewater, a sizable worldwide private equity fund with a focus on the energy sector. With half-year sales of $170.6 billion, the second-largest independent oil and gas trader in the world is situated in Singapore. Therefore, the Norwegian component of the partnership is not very significant; Bluewater and Trafigura are the true major stakeholders.
The consortium hired the Oslo-based investment bank Pareto Securities to serve as a financial advisor.
Up to $7 billion in value
The consortium places the value of the 51 percent of OMV’s E&P division between 5.5 and 7 billion dollars based on an early pre-due diligence investigation. In light of the existing circumstances, it is challenging to evaluate the value, although it is obviously limited right away.
The OMV subsidiary Petrom in Romania, where it has been rumored that large gas resources are kept in the Black Sea, is excluded from the offer. OMV’s E&P operations in Russia are also not included, but OMV may continue them. Because the investment in Russia is now not for sale, it was written down this year by one billion euros.
supply of gas in Austria
Regarding the future supply of gas to Austria, big promises are made. The letter claims that in exchange, one may guarantee Austria’s gas supply. Additionally, one offers a strategic partnership with the Austrian government, which has the first right of refusal over all future gas resources that the newly established OMV E&P would find and exploit.
It is not specified how precisely Austria should be protected. Reference is made to the severe buyer rivalry for assets in Norway in order to make the offer more appealing. The letter also discusses Austria’s potential for shale gas.
De facto, the letter is merely a declaration of intent and not a complete offer. This is signed by Johann Pleininger, vice president and chief executive officer of OMV; he must have been the one in charge. According to reports, Pleininger’s contract will not be renewed even though he oversees E&P on the board.
Checks for BAG
OMV has stated that it will continue to invest in gas while also adjusting its long-term green plan in light of the gas crisis. The organization plans to invest over 1.7 billion euros in funding both this year and in the years to come. Therefore, opponents of the initiative question why the largely state-owned OMV would sell its output in Europe, which includes Norway and is a component of the key infrastructure, to a group that includes an equity fund and a global commodity trader. The ultimate goal of both players is to maximize earnings.
The consortium partners, in the opinion of supporters, might ensure Austria’s supply security.
On behalf of VP Finance Minister Magnus Brunner, the state holding company BAG, which owns 31.5 percent of OMV, has recently been closely collaborating with consultant McKinsey to examine all options for how Austria’s gas supply might be secured independently of Russia in the future. There was a discussion about this recently with Brunner. This investigation also includes the Oslo letter. Results won’t likely be seen until the end of the year.