OMV Buys Stake in Russia Gas Field

OMV Buys Stake in Russia Gas FieldOMV Buys Stake in Russia Gas Field

Austrian energy group OMV has agreed to buy about a quarter in one of Russia's largest gas fields for $1.85 billion, a major expansion push that gives previous owner Uniper a badly needed cash injection. The transaction is expected to close by the end of the year and will be retroactively effective as of Jan. 1, 2017, OMV and Uniper said in two separate statements on Sunday, adding cash on balance sheet would also be added to the purchase price, Reuters reported. Sources had told Reuters last year that Uniper might put its 24.99% stake in Yuzhno Russkoye up for sale, expecting it to fetch $1.7-$2.5 billion. "The acquisition will build a new core area, Russia, in our upstream portfolio adding 100,000 barrels of oil equivalent per day to OMV's production," OMV Chief Executive Rainer Seele said. OMV said the deal would reduce the group's production costs, adding it would be entitled to the field's dividends starting 2017, with annual payments of about $200 million expected in the mid-term.

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