OMV AG subsidiary OMV Exploration & Production GMBH will pay $540 million for a 50% stake in a newly formed joint venture company, SEB Upstream Snd. Bhd., under an agreement entered with Sapura Energy Bhd.(OGJ Online, Sept. 12, 2018).
Additional payment of as much as $85 million is possible based on certain conditions mainly linked to the resource volume in Mexico’s Block 30 at the time of the final investment decision. Both companies have agreed to refinance the existing intercompany debt of $350 million.
“The oil and gas demand is expected to increase by 20% until 2030 in Malaysia and OMV is taking the opportunity to capitalize on this growing market,” said Rainer Seele, chief executive officer and chairman of OMV Group.
The partnership’s management will be based in Malaysia and there will be equal representation on the board.
Based in Malaysia, Sapura Upstream holds an expected life of field production of 260 million boe. The company’s production entitlement in 2017 was 4.1 million boe/year from fields in Peninsular Malaysia. Sapura Upstream has two natural gas exploration and production blocks offshore Sarawak. First gas from the SK408 gas fields is expected in 2020 with a ramp-up in 2023 that could reach an estimated total plateau production entitlement of 21 million boe/year. The company also holds acreage in New Zealand, Australia, and Mexico.