Austria-based energy company OMV, in which Abu Dhabi’s investment vehicle Mubadala owns 24.9 per cent shares, has signed a deal with Malaysian integrated oil and gas producer and offshore contractor Sapura Energy to buy 50 per cent of its upstream business.

According to the heads of agreement signed between OMV and Sapura Energy, the transaction is valued at $1.6bn.

Both parties would continue negotiations to iron out the details on an exclusive basis, according to the announcement by Sapura.

According to media reports, Sapura was looking to raise capital from its upstream division by listing the asset on the Malaysian stock market, but has instead ended up going for a private transaction with OMV.

OMV is looking to expand its upstream portfolio globally. Besides, the company already has offshore operations or activity in Romania, the North Sea, and Australasia. It produced 348,000 barrels of oil equivalent a day last year.

The company in April this year made a key foray into Abu Dhabi by scooping a 20 per cent stake in the Sarb and Umm Lulu oil block in Adnoc’s premium offshore concession.

The deal with OMV also comes at a strategically important time for Sapura Energy, which is looking to make inroads into the GCC’s energy space.

In Saudi Arabia, Sapura has made a bid to enter Saudi Aramco’s long-term agreement (LTA) pool of offshore contractors, and is currently awaiting Aramco’s decision on the expansion of the pool.

In Abu Dhabi, Sapura is eyeing Adnoc’s offshore contracts, and is currently in the process of prequalifying as a certified contractor which will allow it to pick up work in the emirate.

On its home turf in Malaysia, Sapura Upstream recently started production from its SK310 B15 gas field offshore Sarawak, and is currently ramping up development of its SK408 block.

It has also secured block 30 in the Sureste basin of offshore Mexico.