Bloomberg News

OMV in Talks With RWE to Sell 17% Stake in Nabucco Gas Pipeline

December 07, 2012

OMV AG (OMV), central Europe’s biggest oil company, is in talks about RWE AG (RWE) leaving the Nabucco natural gas pipeline project.

Both companies today confirmed that they are in discussions over RWE’s 17 percent stake in Nabucco. OMV remains committed to the the project, which is intended to transport gas from the Caspian Sea region to central Europe, the Vienna-based company’s Chief Executive Officer Gerhard Roiss said today at a press briefing in the Austrian capital.

“It is not an issue of control, it’s an issue of investment,” Roiss said. “The shareholders of Nabucco at the end will be the ones who have the gas.”

The Nabucco group of six companies originally wanted to build a 3,900-kilometer (2,400-mile) pipeline traversing the Caspian, Middle East and Europe. Construction goals have been shortened to the so-called Nabucco West, a 1,315 kilometer line that would carry natural gas from Azerbaijan into Austria. Nabucco is currently negotiating with operators of the Central Asian nation’s Shah Deniz II field over a stake in the project.

“We are in the process of discussing a transfer of our share with OMV,” RWE spokeswoman Sabine Jeschke said by phone. “The process is ongoing.”

The Nabucco West pipeline is competing with the Trans- Adriatic Pipeline, known as TAP, to get gas from Shah Deniz. The gas field’s operators, who include BP Plc (BP/) and Statoil ASA (STL), have an option to take a 50 percent stake in TAP.

“Nabucco has to be commercially viable,” Roiss said. “We’re not going to force any prestige projects. We’re too small for that.”

OMV, which is searching for natural gas beneath the Black Sea with Exxon Mobil Corp. (XOM:US), would consider building its own pipeline to Austria depending on what the companies discover, Roiss said.

“You cannot develop a field without transport,” the CEO said. “The value of Nabucco is in the intergovernmental agreements.”

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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