OMV plans to invest EUR 400 mm in Russian projects

OMV, Austria's biggest oil company, plans to invest as much as EUR 400 mm ($ 471 mm) in Russian projects, as it seeks new sources of oil to fuel an expansion in Central Europe. The company is looking for Russian assets that will produce 30,000 bpd of oil and add 30 mm barrels to reserves, CEO Wolfgang Ruttenstorfer told.
OMV plans to increase production by about a third to 160,000 bpd in five years and double its market share in the Danube River region, which is home to 120 mm people.

Russia, the world's second-biggest oil producer behind Saudi Arabia, may become the company's sixth major production area after Austria, the North Sea, North Africa, Pakistan and Australia/New Zealand.
"Russia will be the core of our international expansion," said Helmut Langanger, OMV's head of exploration and production. "Our preference is to team up with a strong Russian partner." The Vienna-based company plans to invest EUR 2.7 bn in capital projects from 2003 to 2005. This year's figure is EUR 1.4 bn, including 40 % for exploration and production and a similar amount for refining and marketing.
"We are in touch with most of Russian companies" on possible cooperation, Ruttenstorfer said. "This is a completely new game for us."

OMV expects to complete by the end of this year an agreement with Yukos, Russia's biggest oil producer, to extend an oil pipeline to Vienna from Slovakia. The 60 km extension would give OMV a second source of oil for its Schwechat refinery, which is currently supplied by a pipeline from Trieste, Italy, on the Adriatic Sea.
Yukos plans to spend EUR 28 mm ($ 33 mm) to build the pipeline in 2005. The company owns 49 % of Transpetrol, Slovakia's state-run oil pipeline operator.

OMV does not plan to reverse the Adria-Vienna pipeline to let Russian companies ship Siberian oil to the Adriatic Sea, Ruttenstorfer said. The plan was proposed by Transneft, Russia state-owned pipeline monopoly, in June.
The company expects to produce 6 bn cm of gas in Pakistan next year. It alsoplans to pull out of an oil production project in Sudan, Ruttenstorfer said.