Austria's OMV said to win deal for Abu Dhabi oil concession

Sources say agreement to produce oil from Abu Dhabi offshore fields to be announced in coming weeks
Austria's OMV said to win deal for Abu Dhabi oil concession
(Getty Images - for illustrative purposes only)
By Bloomberg
Wed 28 Feb 2018 03:24 PM

Austrian oil producer OMV is poised to win a deal to produce oil from offshore fields in Abu Dhabi, according to people with knowledge of the situation.

While the agreement with OMV has yet to be completed, an announcement is expected in the coming weeks, the people said, asking not to be identified because the negotiations are confidential.

Abu Dhabi National Oil Co, the state-owned company whose fields produce almost all the United Arab Emirates’s oil, is awarding new concessions to foreign investors to gain access to technology and finance and secure markets for its crude. OMV would be the second company with links to Abu Dhabi to gain a deal.

Abu Dhabi’s sate-run investment company, Mubadala, is the second-largest shareholder in OMV behind the Austrian state. Spain’s Cia Espanolade Petroleos, wholly owned by Mubadala, already paid $1.5 billion for a 20 percent stake in a group of offshore fields.

“A cooperation between Adnoc and OMV would be good news for OMV,” Tamas Pletser, an analyst with Erste Group in Budapest said by telephone. “Good relationships are what matter the most in the region with its vast reserves, and the two companies at a later stage could also refine oil.” An oil concession would probably be “only a first step.”

An Adnoc spokesman said discussions are ongoing with a number of potential partners on the remaining concession areas. OMV declined to comment.

Abu Dhabi is also striking deals with the biggest buyers of its crude oil.

Earlier this week, Japan’s Inpex Corp signed a 40-year deal for a 10 percent stake in Adnoc’s Lower Zakum field for $600 million. A group of Indian companies have already paid the same amount for 10 percent of Lower Zakum field.

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Last Updated: Wed 28 Feb 2018 02:29 PM GST

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.