Update 1 - Austria's OMV Still in Shopping Mood, Targeting Downstream Assets

Source Press Release
Company OMV 
Tags Corporate Deals, Deals, Refining & Marketing Activities
Date October 31, 2018

* Group has spending budget of more than 5 bln euros

* Price for upstream assets increasing along with oil price

OMV aims to grow in aviation fuel and petrochem business (Adds details, background, quotes)

Austria’s oil and gas group OMV is on the lookout for attractive  buys to strengthen its downstream business in line with its strategy to grow in low-cost regions, its chief executive said.

The downstream business includes the refining of crude oil and the transportation, storage and distribution of natural gas.

The group earmarked a 10 billion euro ($11.32 billion) budget for acquisitions in March, of which it has so far spent $2.1 billion for production and exploration, or upstream, assets in New Zealand and Abu Dhabi.

The planned takeover of a 50 percent stake in Malaysian Sapura Energy Bhd’s upstream business is expected to cost less than $1 billion, according to analysts.

“We will continue to be very active, if there are good deals available in the market, OMV will look at it,” Rainer Seele said in an investor call on Wednesday when asked about  acquisitions.

In the upstream sector, the window of opportunity was progressively closing as the high oil price lifted the price tag for upstream assets.

“We will focus on more downstream assets,” the CEO said.

Responding to the e-mobility drive in Europe, OMV is adjusting the product portfolio of its refining business and reducing its diesel and gasoline production. Instead it is shifting the focus to aviation fuel and petrochemicals, banking on an ever rising appetite for air travel and plastic products.

The partly state-owned company, which operates refineries in Austria, Germany and Romania, has said it aims to grow in regions outside Europe such as Asia where it expects demand to increase most. ($1 = 0.8834 euros) (Reporting by Kirsti Knolle, editing by Tassilo Hummel and David Evans)

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