OMV has agreed to sell its majority stake in the Maari oil field as part of its strategy to shift its production away from heavier-emitting resources.

The firm, which also manages the Maui and Pohokura gas fields, will sell its 69 per cent interest in the offshore field to Singapore-based Jadestone Energy for US$50 million. Other partners in the venture are ASX-listed Horizon Oil and Cue Energy Resources, a subsidiary of New Zealand Oil & Gas.

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"The divestment of the Maari field further optimises our portfolio and will shift us in New Zealand to a gas-only producer," Johann Pleininger, deputy chairman of OMV's executive board, said in a statement.

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"This underlines OMV's strategy to produce significantly more natural gas than oil to reduce the carbon intensity of the product portfolio in the future."

Maari lies in about 100 metres of water about 80 kilometres off the Taranaki coast. It was discovered in 1983 but didn't begin production until 2009. It was the first offshore field OMV operated and has been New Zealand's biggest liquids producer for several years. It produced about 2.3 million barrels of oil last year.

OMV is working to increase gas production from the Maui and Pohokura fields and is planning a three-well exploration programme off Taranaki this summer. It also awaits approval for a one-well campaign in the Great South Basin off the Otago coast.

While Maari is expected to continue producing until about 2031, Jadestone said it believes there is substantial potential for reserves upside.

Jadestone owns the Stag oil field and Montara project off north-western Australia and has exploration and development interests in Vietnam and the Philippines.

"The company intends to establish New Zealand as an extension to its Australia core area," chief executive Paul Blakeley said in a statement. "As another maturing hydrocarbon basin in the region, additional opportunities are likely to become available which fit the company's strategy to acquire and reinvest into mid-life producing assets."

Subject to government approvals, the transaction is expected to be completed within the coming year. OMV can potentially earn up to US$3.9 million more should Brent crude oil prices average US$75 a barrel during 2020 and 2021. Brent crude was recently trading at about US$62 a barrel.

- BusinessDesk

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