OMV, Abu Dhabi Set to Sign Oil Agreement

OMV, Abu Dhabi Set to Sign Oil AgreementOMV, Abu Dhabi Set to Sign Oil Agreement

OMV AG and its state-owned partner in Abu Dhabi, the UAE, are set to sign a $1.5 billion oil exploration agreement that could be the first major step for joint global expansion in oil production and refining. Austria’s Chancellor Sebastian Kurz and Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed will take part in ceremonies on Sunday to sign an agreement that may be followed by joint investments in refineries or Asian markets, Bloomberg reported.

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

"OMV’s $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 is looking to expand in the Persian 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 North Sea and toward lower-cost oil and gas fields in Russia and the Middle East. Abu Dhabi holds about 6% of global crude reserves and produces most of the oil in the UAE.

The deal to be signed is Seele’s first effort to capitalize 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.

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