Johann Pleininger, deputy chairman and member of the OMV Executive Board responsible for Upstream (Exploration & Production) spoke exclusively to Pipeline Magazine’s Julian Walker about the Austrian firm’s Middle East ambitions and opportunities it sees in the downstream sector.
Do you see the Middle East as a core upstream development area?
Yes, of course. OMV focuses its upstream activities on core regions and one of these regions is the Middle East and Africa. We go for “value over volume” and that’s why we are focusing on extending our footprint in the Middle East as a low-cost production region. OMV will target acquisitions in regions with attractive cost positions, like the Middle East and Russia, to reduce its portfolio cost.
In the process of shifting its portfolio to low-cost regions offering ample opportunities for reserve replenishment, OMV leverages on a series of long-term strategic partnerships. The close connection with the Abu Dhabi-based International Petroleum Investment Company and Mubadala supports OMV’s endeavors in the region. Mubadala, the former IPIC, has been OMV’s shareholder since 1994 and holds 24.9 per cent of OMV AG shares.
How important is the UAE to OMV’s Middle East strategy?
Are you planning more investments in the UAE? OMV is looking to engage in further opportunities in the United Arab Emirates. In May 2017 the Abu Dhabi National Oil Company (ADNOC) and OMV signed a Memorandum of Understanding. The agreement explores potential opportunities to work together to support ADNOC’s downstream business and the company’s smart growth strategy. The agreement provides for cooperation in a number of areas, including the evaluation of opportunities in downstream projects; the exchange of knowledge and experience in refining operations and refinery-petrochemical integration and optimisation, as well as downstream technical and maintenance support.
Back in 2016 ADNOC, OMV, and Occidental Petroleum have signed a Technical Evaluation Agreement over several undeveloped oil and gas fields in North-West Offshore Abu Dhabi including the Ghasha and Hail areas. The agreement comprises a four-year seismic, drilling and engineering work program for exploration, appraisal and potential field developments. With this project, OMV is intensifying its strategic partnership with ADNOC alongside its existing participation in the appraisal of the sour gas Shuwaihat field and its East Abu Dhabi exploration activities.
How much emphasis do you put on partnerships when doing business in the Middle East?
Partnerships and good relations are the basis for our business. We respect our partners and the countries we are working in. In the Middle East in particular we have long-lasting and fruitful partnerships. In the UAE, as just mentioned, we will have a close exchange of expertise that will enable us to make our outstanding, long-term partnership with ADNOC even stronger.
In Iran, OMV has a long-lasting partnership with the country, which we entered in 2001. Last year the National Iranian Oil Company (NIOC) and OMV signed a Memorandum of Understanding concerning the evaluation of various fields in the Zagros area in the west of Iran, for potential future development. OMV also signed a joint study agreement with NIOC Exploration for the Fars area.
Read the full interview at pipeline.com to find out Johann Pleininger’s comments on the OMV/Dana Energy deal, read his views on the low oil price environment and find out OMV’s downstream activities in the Middle East.
Share your insights and join the conversation: Where do you see the gas industry heading in the next 10 years? Leave your comment below.
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