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 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 does OMV plan to enhance its energy supply reliability for customers amidst the geopolitical uncertainties surrounding Russian gas supplies?
**Interview with Alfred Stern, CEO of OMV**
**Interviewer**: Thank you for joining us today, Mr. Stern. Recently, OMV has been in the headlines due to ongoing disputes with Gazprom regarding gas supplies. Could you explain the current situation regarding the arbitration decision and its implications for OMV?
**Alfred Stern**: Thank you for having me. The arbitration ruling was a significant milestone for us. It recognized our claims against Gazprom for irregular deliveries and the complete cessation of supplies we experienced last year. Now, we can offset the awarded damages against our ongoing payment obligations to Gazprom Export. However, we’re aware that this could potentially lead to an interruption in Russian gas deliveries.
**Interviewer**: You mentioned the possibility of interruptions. How is OMV preparing for such an eventuality?
**Alfred Stern**: We’ve proactively secured alternative gas supplies, primarily from sources like Norway and liquefied natural gas (LNG). Our gas storage facilities are currently over 90 percent full, ensuring that we can meet our contractually guaranteed gas volumes for our customers, even if Gazprom were to halt supplies unexpectedly. We feel confident that we can manage any short-term impacts.
**Interviewer**: With the recent shifts in the gas market and your commitment to reducing dependence on Russian gas, what does the future hold for OMV?
**Alfred Stern**: Our goal has been to diversify our sources. While we recognize that we are still contractually obligated to purchase Russian gas, I want to stress that we have significantly reduced our reliance on it. If Gazprom does stop deliveries, it could present us with an opportunity to withdraw from our long-term contract, especially given the potential breach of contract due to their inconsistency.
**Interviewer**: That sounds like a strategic pivot for OMV. What impact do you anticipate this will have on your customers and the broader market?
**Alfred Stern**: I believe that, when implemented successfully, our strategy will reassure our customers about the reliability of their gas supply, which is crucial in this volatile market. The broader impact should lead to more stability as we shift towards more diverse and sustainable energy sources, which is ultimately beneficial for everyone involved.
**Interviewer**: Thank you for your insights today, Mr. Stern. It seems OMV is navigating a complex situation with agility.
**Alfred Stern**: Thank you for having me. We’re committed to ensuring reliable energy supplies despite the challenges and are optimistic about the future direction of the energy market.
