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 steps is OMV taking to ensure energy security in light of potential disruptions in gas supplies from Gazprom?
**Interview with Alfred Stern, CEO of OMV**
*Interviewer: Thank you for joining us today, Mr. Stern. OMV recently secured a significant arbitral award related to the disputes with Gazprom over gas supplies. Can you elaborate on what this award means for OMV?*
**Alfred Stern:** Thank you for having me. The arbitral award of over $243 million is a crucial development for OMV. It relates to irregularities in our gas supplies from Gazprom, particularly the complete cessation of deliveries in Germany in September 2022. This financial support will help compensate for the damages we incurred and offsets our payment obligations to Gazprom, creating a more stable financial position for us amidst ongoing uncertainties.
*Interviewer: You mentioned potential interruptions to Russian gas supplies as a result of this claim. How is OMV preparing for such a scenario?*
**Alfred Stern:** Indeed, this situation could lead to a disruption in our gas deliveries from Gazprom, but we are well-prepared. OMV has diversified its gas sourcing, significantly increasing our supplies from non-Russian sources like Norway and liquefied natural gas (LNG). Currently, our storage facilities are over 90 percent full, allowing us to meet our contractual obligations to customers even if Gazprom were to halt deliveries.
*Interviewer: Earlier this year, you indicated that OMV is no longer dependent on Russian gas. Could you clarify what that means?*
**Alfred Stern:** Certainly. While we’ve substantially reduced our reliance on Russian gas, we’re still bound by long-term contracts. However, if Gazprom does stop deliveries, it would provide us an opportunity to withdraw from those contracts without being penalized, particularly if they’re in breach. In essence, we are moving towards a more independent stance on gas supply, ensuring a robust and flexible energy sourcing strategy.
*Interviewer: What are the broader implications for OMV and the European gas market should Gazprom stop deliveries altogether?*
**Alfred Stern:** A halt in Russian gas would certainly shake up the market, but it would also accelerate the shift towards alternative energy supplies within Europe. For OMV, we are in a strong position to adapt quickly, leveraging our diverse supply chain and storage capabilities. This is part of a larger strategic transition within Europe towards energy security and sustainability.
*Interviewer: Thank you for your insights today, Mr. Stern. We look forward to seeing how OMV navigates these challenges in the future.*
**Alfred Stern:** Thank you! It’s an evolving landscape, and we’re committed to ensuring reliable energy for our customers while adapting to the changing market dynamics.