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Russia could end up controling Romania’s oil reserves and half its gas reserves via stake in Austrian OMV

Romania Insider – by Andrei Chirileasa

Russia’s state oil and gas company Gazprom is currently in talks to buy a 24.9 percent stake in Austrian group OMV, according to Reuters.

This would make Gazprom the second largest shareholder of OMV, as the Austrian state holding company OIAG owns a 32 percent in the group.

OMV is the majority shareholder of Romania’s oil&gas company OMV Petrom, which is the country’s largest company. OMV Petrom controls Romania’s oil production and half of the country’s natural gas production.  

Petrom’s proven oil and gas reserves amounted to 728 million boe (barrels oil equivalent), end-2013, which is two thirds of OMV’s reserves of 1.31 billion boe.

Petrom also holds 50 percent of the Neptun offshore gas field in the Romanian waters of the Black Sea, with American group ExxonMobil holding the other half. This gas field, which is currently explored by the two companies in order to evaluate its commercial potential, could cover Romania’s consumption for some six years and is important for the country’s future energy independence.

If Gazprom finalizes a transaction on OMV, this could impact Romania’s goal to secure its energy independence from Russia. It would be a second setback after the failure of the Nabucco project last year. Romania was part of the project for the Nabucco gas pipeline which was supposed to bring gas from the Caspian Sea state of Azerbaijan to Western Europe. The project was cancelled as it didn’t have enough political support in the European Union.

Recently, Austria’s OMV signed a pact with Gazprom to build a branch of the disputed Russian- backed South Stream pipeline to Austria. This was announced during a visit by Russian president Vladimir Putin to Austria and raised serious concerns within the European Union, which has imposed sanctions over Russia’s annexation of Crimea this year.

The naming of Austrian businessman Siegfried Wolf as Chairman of the Board for OIAG, Austria’s state holding which controls the Austrian state’s stakes in different companies, including OMV, was also controversial. Wolf is believed to be a supporter of the Russian president. He is also chairman of the board for Russian Machines, a group which is controlled by Russian oligarch Oleg Deripaska.

According to Reuters, Gazprom is negotiating with Abu Dhabi’s International Petroleum Investment Co (IPIC) to buy the 24.9 percent stake it holds in OMV. Austria’s OIAG has a shareholder pact with IPIC and coordinates any shareholding changes. It has right of first refusal to buy the stake from IPIC.

OMV group is listed on the Vienna Stock Exchange and has a market capitalization of EUR 10.7 billion. OMV Petrom is listed on the Bucharest Stock Exchange and is currently valued at EUR 6.07 billion. OMV holds 51 percent of Petrom, while the Romania state still owns 20.64 percent of the company and Romanian investment fund Fondul Proprietatea has a 19 percent stake.

Andrei Chirileasa, andrei@romania-insider.com


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