Home | News    Thursday 2 October 2003

Austria’s OMV to book hefty profit on Sudan sale


BAD TATZMANNSDORF, Austria, Oct 2 (Reuters) - Austrian oil group OMV expects to book a profit of more than half the $115 million sales price on its stakes in two exploration blocks in Sudan, a senior executive said.

"Analysts are reckoning with a book profit of around $80 million," OMV Financial Director David Davies told Reuters in an interview late on Wednesday, adding he was comfortable with that estimate.

"It should be more than half (of the sales price)," Davies said in reference to the profit, which it expects to book for 2003.

Last month OMV, Austria’s largest industrial group, became the latest Western firm to divest from war-riven Sudan following strong criticism from human rights groups.

It sold its stakes in exploration blocks 5A and 5B in the Muglad Basin some 700 km (440 miles) southwest of the capital Khartoum to India’s Oil and Natural Gas Corp ONGC for around $115 million.

OMV said the proceeds from the sale would be invested in further expansion of its oil and gas production.

Davies, speaking during an investor conference hosted by Erste Bank, said OMV was also looking into the disposal of its exploration and production assets in Ecuador and Venezuela.

"It’s not our aim to establish Latin America as a core region," he said. The assets in the two countries were acquired as part of OMV’s purchase in January of Preussag’s international exploration and production portfolio.

"If we don’t receive any decent offers then we’ll just hold onto the assets and wait. We’re under no pressure," Davies said.

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