OMV to sell its Turkish fuel products unit to Vitol
The Austrian oil and gas group OMV has announced the sale of its Turkish subsidiary Petrol Ofisi to Swiss oil trading giant Vitol for €1.36 billion (Dh5.3bn).
OMV, in which Abu Dhabi’s Ipic has a 24.9 per cent stake, had put its Turkish subsidiary up for sale a year ago in the context of plunging crude prices that depressed the global oil sector.
The transaction, which is subject to regulatory approval, is expected to be finalised by the third quarter of this year at the latest, the company said.
As a result OMV will record a depreciation of €186 million in its results for the fourth quarter of 2016, in addition to the €148m depreciation booked at the end of December for the sale of the subsidiary.
The group also indicated that its 2017 results will be hit by a negative exchange rate effect of €1.1bn, linked to the plunge in the Turkish lira.
“The original plan of integrating Petrol Ofisi into the value chain of OMV Group could not be realised. Therefore, the decision to sell the company was the right and necessary step in the course of implementing our corporate strategy.
“In light of the challenging environment, I am pleased that we successfully concluded the negotiations,” said the group chief executive Rainer Seele.
Like other OMV subsidiaries, Petrol Ofisi has suffered severe depreciations in recent years and has been hit by controls on oil profit margins by the Turkish regulator.
Last month, OMV, which employs 24,500 people, reported fourth-quarter clean current cost of supplies (CCS) earnings before interest and tax of €315m, up 68.4 per cent from a year earlier topping estimates of €305m in a Reuters survey of analysts.
This measure strips out special items and inventory holding gains or losses.
Free cash flow turned positive last year, climbing to €1.08bn on cost savings and divestments.
In March, Abu Dhabi’s Adnoc, OMV and Occidental Petroleum from the United States signed a contract over several undeveloped oil and gasfields in north-west offshore Abu Dhabi including the Ghasha and Hail areas, according to the OMV website. The agreement covers a four-year seismic, drilling and engineering work programme for exploration, appraisal and potential field developments.
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Updated: March 5, 2017 04:00 AM