May 24, 2018 / 1:45 PM / 5 months ago

OMV looking to buy Gazprom's Siberian assets instead of swapping: sources

MOSCOW/VIENNA (Reuters) - Austrian energy company OMV (OMVV.VI) is looking to buy some of Gazprom’s (GAZP.MM) Siberian assets outright after Norway voiced opposition to plans by the two firms to swap assets, sources told Reuters.

FILE PHOTO: The logo of Austrian oil and gas group OMV is pictured at its headquarters in Vienna, Austria, January 21, 2016. REUTERS/Heinz-Peter Bader/File Photo

In 2016 OMV agreed to swap 38.5 percent of its Norway assets for 24.98 percent of a section of Gazprom’s Urengoy gas field.

But Norway is not happy with that plan because it would give the Russian company access to its continental shelf, the Norwegian energy minister told Reuters last week.

The swap deal was meant to close by mid-2017 but still has not been finalised. OMV has said it now expects closure by year-end, saying talks are being complicated by corporate governance issues.

In recent talks, the two companies discussed several options, including cancelling the swap for an outright payment, one source familiar with the talks said.

“There are different options, including this one,” the source said about the possibility of payments by OMV.

Another source, also familiar with the talks, said that OMV may buy Gazprom assets in Siberia instead of swapping for them.

OMV and Gazprom declined to comment.

OMV Chief Executive Rainer Seele told the company’s annual shareholder meeting on Tuesday that talks with Gazprom were ongoing and that OMV remained confident that it could close the asset swap deal by the end of the year.

With the non-cash deal, Austria’s largest energy group aimed to replenish its weakening reserves with access to low-cost oil and gas fields while the Russian gas giant hoped to benefit from diversifying its geographic footprint.

OMV is now in a stronger financial position than it was in 2016 and can easily afford to buy the assets, avoiding potential trouble with the Norwegian government.

OMV has announced plans to spend 10 billion euros on acquisitions and has so far spent 3 billion euros of that on oil concessions in the Middle East.

CEO Seele told shareholders this week he was ready to buy additional assets in Russia.

Russia’s President Vladimir Putin will visit Vienna on June 5 to celebrate 50 years of Russian gas deliveries to OMV.

Reporting by Oksana Kobzeva and Kirsti Knolle; additional reporting by Vladimir Soldatkin; editing by Jason Neely

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