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.
What are the implications of OMV’s recent arbitral award against Gazprom for its future operations and business strategy?
**Interview with Alfred Stern, CEO of OMV**
**Interviewer:** Thank you for joining us today, Alfred. OMV recently won a $243 million arbitral award against Gazprom. Can you explain the significance of this ruling for OMV and its operations?
**Alfred Stern:** Thank you for having me. This arbitral award is quite significant for us as it addresses the financial damages incurred due to irregular gas deliveries from Gazprom, including a complete halt in supply to Germany in September 2022. The awarded damages will help us mitigate those financial impacts and strengthen our position moving forward.
**Interviewer:** There are concerns that this ruling might lead to potential interruptions in gas deliveries from Russia. How is OMV preparing for this scenario?
**Alfred Stern:** We are well-prepared for any potential disruptions. We’ve established alternative supply lines that include significant volumes of gas from Norway and liquefied natural gas (LNG). Additionally, our gas storage facilities are currently over 90 percent full, which ensures that we can meet our customers’ contractual obligations even if Gazprom were to stop deliveries.
**Interviewer:** You mentioned that OMV has reduced its reliance on Russian gas. Can you elaborate on that?
**Alfred Stern:** Absolutely. Over the past few years, we’ve taken proactive steps to decrease our dependency on Russian gas. We’ve significantly reduced our purchases from Russia, and although we are still tied to a long-term supply contract, the dynamics have changed. If Gazprom were to cease deliveries, it could provide us the opportunity to exit that contract without penalties, which is a welcome prospect given the current geopolitical landscape.
**Interviewer:** Looking ahead, what are OMV’s plans for ensuring energy security for its customers?
**Alfred Stern:** Our strategy focuses on diversification and resilience. We’ve already enhanced our capacities for alternative gas supplies and are continuously exploring more avenues to stabilize our supply chain. This includes increasing our LNG import capabilities and strengthening partnerships with other gas suppliers. Our goal is to ensure that we can deliver the contractually agreed-upon gas volumes to our customers without any interruption, regardless of external pressures.
**Interviewer:** Thank you for sharing your insights, Alfred. It seems that OMV is taking significant measures to adapt to these changes in the energy market.
**Alfred Stern:** It’s been a challenging time, but we are optimistic about the future as we adapt to these circumstances. Thank you for having me.