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.
What strategies is OMV implementing to mitigate the impact of potential Russian gas supply disruptions on its operations?
**Interview with Alfred Stern, CEO of OMV**
*Interviewer*: Thank you for joining us today, Alfred. It seems that OMV is navigating a complex situation regarding your gas supplies from Gazprom. Can you explain what led to the decision to offset your claim against Gazprom’s payment obligations?
*Alfred Stern*: Thank you for having me. The decision was primarily a response to our successful arbitration claim against Gazprom. We won an award of 230 million euros due to irregular deliveries, which previously led to disruption in our gas supply. By offsetting this against our current payment obligations, we believe it allows us to manage this ongoing relationship in a way that mitigates financial losses while preparing for any operational changes.
*Interviewer*: You’ve mentioned that this situation could lead to an interruption in Russian gas supplies. How has OMV prepared for this potential disruption?
*Alfred Stern*: We have taken substantial steps to ensure that we can continue to serve our customers effectively. Currently, our gas storage facilities are over 90% full, and we have established alternative sources of gas from non-Russian suppliers, particularly from Norway and through liquefied natural gas (LNG) arrangements. This strategy positions us well to maintain our supply commitments even if Gazprom were to halt deliveries.
*Interviewer*: In light of the ongoing tensions and the uncertainty around Russian gas, how does OMV view its dependency on Russian gas now compared to previous years?
*Alfred Stern*: As I stated earlier this year, OMV is no longer dependent on Russian gas as we once were. We have significantly reduced our purchases from Russia, and this situation presents an opportunity to reevaluate our long-term contracts. Should Gazprom stop their deliveries entirely, it would allow us to withdraw from these contracts due to breach of agreement, aligning our operations with current market realities.
*Interviewer*: Given the complexities of this situation, what impact do you believe it will have on gas delivery volumes to your customers?
*Alfred Stern*: If Gazprom were to cease deliveries, we would still honor our commitments to our customers. We might face minor one-off hedging losses, but these would be overshadowed by the damages we have received from the arbitration. Our focus is on ensuring steady supply and maintaining trust with our customers during this transitional phase.
*Interviewer*: Thank you, Alfred, for shedding light on these developments. It seems OMV is positioning itself strategically to manage this challenging landscape.
*Alfred Stern*: Thank you for having me. Our priority remains to secure reliable energy supplies while navigating the complexities of the evolving geopolitical situation.
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This interview format projects the corporate perspective while providing clarity on the implications of recent developments surrounding gas supplies and contractual relations with Gazprom. Would you like to explore any specific aspects in further detail?