We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 29 Apr 2018 08:26 AM

Font Size

- Aa +

Abu Dhabi, OMV set to sign $1.5bn oil deal in move on global expansion

Austria's Chancellor Sebastian Kurz and Abu Dhabi's Crown Prince Sheikh Mohamed bin Zayed will sign the deal on Sunday

Abu Dhabi, OMV set to sign $1.5bn oil deal in move on global expansion

OMV and its state-owned partner in Abu Dhabi are set to sign a $1.5 billion oil exploration agreement today in what could be the first major step for a joint global expansion in oil production and refining.

Austria’s Chancellor Sebastian Kurz and Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed will take part in ceremonies on Sunday to ink an agreement that may be followed by joint investments in refineries or Asian markets.

Abu Dhabi has been the second-biggest shareholder in OMV after the Austrian government since 1994 and is now looking for partners to explore for oil and upgrade its refineries.

“The United Arab Emirates are already our most important trade partner in the Gulf region and they still offer a lot of potential for Austrian businesses,” Kurz said in a statement before his departure to Abu Dhabi.

The central European country of 9 million is trying to strengthen ties with the Middle East and boost trade with regions outside of Europe.

OMV’s 10 billion-euro ($12.1 billion) budget for buying new assets until 2025 could include upstream and downstream investments in Abu Dhabi, Chief Executive Officer Rainer Seele told investors last month.

OMV said it’s looking to expand in the Gulf region and in Asian markets where demand for higher-graded fuels is rising together with population growth.

Seele has pivoted OMV away from expensive oil production in the North Sea and toward lower-cost oil and gas fields in Russia and the Middle East. Abu Dhabi holds about 6 percent of global crude reserves and produces most of the oil in the United Arab Emirates.

The deal to be signed today is Seele’s first effort to capitalise on Abu Dhabi’s co-ownership. OMV is also seeking a minority stake in the Emirate’s Ruwais refinery, people familiar with the talks have said.

Austria owns 31.5 percent of OMV, while Abu Dhabi’s state-run investment company Mubadala holds 24.9 percent.

Arabian Business: why we're going behind a paywall

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.