Ipic reaches agreement to extend stake in Austria's OMV

Abu Dhabi’s state-owned oil and gas investment company, International Petroleum Investment Company, has agreed to extend its stake in the Austria-based oil company OMV, after prolonged negotiations with the Austrian government.

The deal means that Ipic will not exercise a put option to sell its stake of 24.9 per cent of OMV, which has a market value currently of about €2 billion (Dh8.2bn). The potential sale had been a concern for the Austrian government since early last year, when talks began.

The Austrian government owns 31.5 per cent of OMV via its investment holding com­pany Österreichische Bundes- und Industriebeteiligungen (Öbib).

Ipic originally bought a stake of just under 20 per cent in 1994 and raised that to its current ­level, so that the two government entities own a combined 56.4 per cent in OMV, with the rest held via publicly listed shares.

“Our mutual shareholding in OMV represents decades of collaboration and success between the UAE and Austria, we look forward to what the future holds for both countries and our energy interests,” said Ipic managing director and UAE Minister of Energy Suhail Al Mazrouei, who is in Vienna for the twice-yearly Opec ministers meeting.

Also at the signing was OMV supervisory board chairman Peter Löscher, who formally took over from Peter Oswald last week. Mr Oswald announced in March he would be leaving as OMV continued to struggle with efforts to set a new strategic direction and improve results.

OMV shares have stabilised over the past year after Rainer Seele was appointed chief executive and cut exposure to risky upstream investments, including Libya. But the shares are still worth less than half of what they were seven years ago.

The downstream has been a better performing sector for OMV, including its petrochemicals division Borealis, which it co-owns with Ipic. Abu Dhabi National Oil Company (Adnoc) and Borealis, in turn, are joint venture partners in Borouge, which recently completed a US$10bn upgrade.

Borealis said in March that it nearly doubled profit to €988 million last year and its chief executive said in an interview this week that it was looking at North American expansion oppor­tunities.

The Ipic announcement yesterday did not offer any details of the new shareholding agreement between the two governments, but local Austrian press said the deal included a put option for Ipic that can be exercised in 2022.


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