OMV and Sapura Energy Berhad have closed the agreement to form a strategic partnership, the company said on Feb. 1.

OMV Exploration & Production GmbH, a wholly-owned subsidiary of OMV Aktiengesellschaft, has bought a 50% stake of the issued share capital in a new joint venture company, which will be called SapuraOMV Upstream Sdn. Bhd.

OMV paid $540 million for its 50% interest in SapuraOMV Upstream Sdn. Bhd. In addition, the parties agreed to an additional consideration of up to $85 million based on certain conditions, mainly linked to the resource volume in Block 30, Mexico, at the time the final investment decision is taken. Both parties have also agreed to refinance the existing inter-company debt of $350 million. The management of the partnership will be based in Malaysia and an equal number of representatives from both sides will sit on the board of directors. The new entity, SapuraOMV Upstream Sdn. Bhd. will be fully consolidated in OMV’s financial statements.

SapuraOMV Upstream Sdn. Bhd is a major independent oil and gas company based in Malaysia with an expected life of field production of approximately 260 million barrels of oil equivalent and strong growth prospects.