The claim will now be offset against OMV‘s payment obligations to Gazprom Export from the Austrian supply contract, the Austrian company announced in the evening. This could lead to an interruption of Russian gas deliveries, warns OMV, but feels well prepared for this.
Memory 90 percent full
OMV has now set up alternative gas supplies from non-Russian gas as well as additional gas delivery capacities. Especially with gas from Norway and liquefied natural gas (LNG). “OMV confirms that the company can supply its customers with the contractually guaranteed gas volumes even in the event of a possible interruption in Gazprom Export’s supply,” the statement said. The OMV gas storage facilities are currently over 90 percent full.
This dispute concerned irregular deliveries from Gazprom Export and the complete cessation of deliveries in Germany in September 2022. The awarded damages will make a positive contribution to compensating for the financial damage incurred in 2022, OMV said today. If Gazprom were to stop deliveries in response to the settlement of the damages, OMV would incur small one-off hedging losses, which, however, would be “clearly outweighed” by the damages awarded. Gas deliveries of 5 TWh per month are potentially affected.
No longer dependent on Russian gas
OMV boss Alfred Stern had already said in July that OMV was no longer dependent on Russian gas. OMV has already significantly reduced its purchase of Russian gas. However, OMV says it cannot withdraw from the long-term supply contract, which obliges it to purchase gas from Russia in any case. If Gazprom were to stop its deliveries, this would be an opportunity for OMV to stop purchasing Russian gas. Even if, as Ukraine threatened, no more Russian gas flows through Ukraine from the turn of the year, Russia would be in breach of contract and OMV could withdraw from the now unpopular long-term supply contract. The scenario that gas from Russia will no longer come to Austria has now lost its horror.
– How will the recent arbitral award against Gazprom impact OMV’s financial outlook and operational stability?
**Interview with Alfred Stern, CEO of OMV**
**Interviewer:** Thank you for joining us, Mr. Stern. Recent developments indicate that OMV may face interruptions in gas deliveries from Gazprom due to a court ruling. Can you explain how this situation may impact your operations?
**Alfred Stern:** Thank you for having me. Indeed, our recent claim against Gazprom could lead to an interruption in deliveries, but I want to assure our customers that we are well-prepared for this scenario. Our gas storage facilities are over 90 percent full, and we have already secured alternative gas supplies, particularly from Norway and liquefied natural gas (LNG). This allows us to maintain supply to our customers even if Gazprom were to halt deliveries.
**Interviewer:** You mentioned alternative gas supplies. How has OMV adapted its supply strategy in response to the ongoing issues with Russian gas?
**Alfred Stern:** Over the past year, we have significantly reduced our reliance on Russian gas. While we still have a long-term supply contract that we cannot withdraw from immediately, we have actively diversified our sources. This strategic move includes increasing imports of non-Russian gas, which positions us to be less dependent on a single supplier.
**Interviewer:** There are reports that the damages awarded to OMV from the court case against Gazprom could cushion some financial losses due to potential delivery interruptions. Can you elaborate on that?
**Alfred Stern:** Yes, we believe that the damages awarded will contribute positively to offsetting any financial impact we might face from delivery interruptions. While we could incur some one-off hedging losses if Gazprom suspends deliveries, these would be clearly outweighed by the damages we’ve received. Our goal is to continue protecting our financial standing while ensuring we can meet our contractual commitments to customers.
**Interviewer:** How do you foresee the situation evolving if Gazprom stops deliveries entirely?
**Alfred Stern:** If Gazprom were to stop their deliveries, it would legally breach our contract. In that case, we would have grounds to withdraw from the agreement. This could actually provide us a pathway to completely exit the long-term supply contracts that have become increasingly problematic for us. We are confident in our ability to fully transition to more stable, non-Russian sources of gas moving forward.
**Interviewer:** Thank you for your insights, Mr. Stern. It sounds like OMV is taking proactive steps to manage this evolving landscape.
**Alfred Stern:** Thank you. We are committed to ensuring stability for our customers and will continue to pursue strategies that bolster our supply and reduce our dependency on any one source.
