OMV: Downstream Restructuring on Track
OREANDA-NEWS. OMV Deutschland GmbH has signed an agreement to sell its 45% share in the German Bayernoil refinery network to Varo Energy B.V. (Varo Energy). In addition to the stake in the refinery network, the transaction includes related inventory, the bitumen plant in GroЯmehring and the wholesale business related to Bayernoil.
OMV CEO Gerhard Roiss: "This transaction marks a milestone in realizing our strategy in shifting low-return downstream assets towards high-return upstream assets. 2013 was the decisive year where we crossed the bridge in becoming an upstream-focused integrated oil and gas company. This year we have reached several important milestones, amongst others, we announced a record result for 2012, invested heavily in the North Sea and closed several divestments besides Bayernoil."
The sale marks the finalization of the planned reduction in OMV’s annual refinery capacity by 4.6 million tons to 17.4 million tons in the refineries Schwechat, Burghausen and Petrobrazi.
"This transaction represents the biggest step in the defined divestment program, targeting proceeds of EUR 1 bn by the end of 2014 and clearly underpins our capability to deliver on our strategic priorities. The optimization of our refining and marketing portfolio is now largely completed. The result is an asset base with superior integration and hence a strong competitive advantage in our defined core market", said Manfred Leitner, Executive Board member responsible for Refining and Marketing.
The OMV strategy aims to optimize the Refining and Marketing share of capital employed within the overall portfolio. The refinery Bayernoil is not integrated with regard to petrochemicals and is, therefore, not linked to the plastics business, hence the decision to sell it. OMV will continue to operate three refineries: those in Schwechat (Austria) and Burghausen (Southern Germany) feature integrated petrochemical production, while the refinery in Petrobrazi (Romania) is completely dedicated to processing Romanian crude oil and, therefore, 100% integrated with the upstream business.
The filling station business in Germany remains an important business area for OMV. Therefore, the transaction with Varo Energy contains contractual arrangements for the future supply of the OMV retail stations in Germany.
The deal is set to close in 2014 and is subject to, in particular, the non-exercise or waiver of pre-emption rights by existing co-shareholders and merger control clearance. Both parties have agreed not to disclose the sale price.