Carlyle exploring multibillion-dollar offer for OMV oil and gas assets

Aaron Kirchfeld, Dinesh Nair and Vinicy Chan, Bloomberg November 30, 2022

(Bloomberg) — Carlyle Group Inc. is exploring a multibillion-dollar bid for a large part of Austrian energy company OMV AG’s oil and gas portfolio, in what would be a bold move by a buyout firm to further expand into fossil fuels, people familiar with the matter said.

The private equity firm is eyeing OMV’s upstream operations in most of the markets where it operates, the people said, asking not to be identified because the information is private. 

Shares of OMV jumped as much as 6.9% in Vienna trading Tuesday, the biggest intraday gain in a month. They were up 3.6% at 3:45 p.m. local time, giving the company a market value of about €16.5 billion ($17.1 billion).

OMV plans to reduce oil and gas production by a fifth by 2030 and exit upstream production of fossil fuels by 2050. It has upstream operations in places including Libya, Iraqi Kurdistan, Malaysia, Norway and the United Arab Emirates.

“The currently favorable commodity environment makes it a good time for OMV to consider a sale,” Bloomberg Intelligence analysts including Salih Yilmaz wrote in a note Tuesday. “Investors are likely to welcome the optimization of upstream assets.”

Fossil Fuels

Any deal would likely exclude OMV’s projects in Austria and Russia as well as its stake in listed Romanian unit OMV Petrom SA, the people said. 

OMV would need support from the Austrian government, which owns almost 32% of the company, if it decides to go ahead with any divestments. Abu Dhabi sovereign wealth fund Mubadala Investment Co. has a 25% stake in OMV. 

Other suitors have also expressed interest in the portfolio. A representative for billionaire Kjell Inge Røkke’s Aker ASA said the company was previously part of a consortium looking at OMV’s upstream assets this summer. The firm, which is the biggest shareholder in Norwegian oil producer Aker BP ASA, is no longer part of the bidding group, the spokesperson said.

Deliberations are ongoing, and there’s no certainty they’ll result in a transaction, the people said. Representatives for Carlyle and OMV declined to comment. 

New Focus 

Unlike some of its buyout peers, Carlyle has not completely shied away from investing in fossil fuels. It’s a significant shareholder in UK independent oil and gas explorer Neptune Energy Group Ltd. and also owns a large minority stake in Spanish refiner Cepsa. 

Earlier this year, Carlyle combined its energy business and infrastructure arm, as part of push to have its dealmakers work more closely together. Carlyle is searching for a new co-head of its energy business as Avik Dey, a renewables specialist who only joined this summer, will leave at the end of November.

OMV is seeking to transform itself from one of eastern Europe’s biggest fossil-fuel companies to a green enterprise built around chemicals, recycling and electric-vehicle infrastructure. 

Other European energy majors are also reducing their exposure to non-renewables, as they accelerate investments in clean energy. Spanish oil and gas giant Repsol SA sold a quarter of its exploration and production division for $3.4 billion in September to a US private equity firm, in a dramatic downsizing of its exposure to fossil fuels.


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