UK law firm LXL and Lee Hishammuddin Allen & Gledhill have advised Malaysia’s Sapura Energy on its agreement to establish a joint venture with Austrian energy group OMV.

Under the terms of the agreement, OMV will pay $540 million for a 50 percent stake in the Malaysian firm’s exploration assets. Sapura Energy will also transfer $350 million of its debt into the new firm, called SEB Upstream (SUP), of which OMV has agreed to refinance half, Reuters said. 

OMV has also agreed to pay up to an extra $85 million, dependent on whether an exploration in Mexico is successful and on the future oil price.

Sullivan & Cromwell was legal counsel to Merrill Lynch, which acted as the financial adviser to Sapura Energy. The Sullivan & Cromwell team was led by New York partner Stephen M. Kotran.

The Austrian group, which is betting on increasing demand for fossil fuels, wants to grow in low-cost countries outside Europe and has declared Southeast Asia a new core market, Reuters added. It said that Sapura Energy, Malaysia’s largest oil and gas services company, had posted losses for three consecutive quarters, but its upstream business had been profitable in that time.

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