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 has the recent arbitral award against Gazprom influenced OMV’s energy sourcing strategy?
**Interview with Alfred Stern, CEO of OMV**
**Interviewer:** Good evening, Mr. Stern. Thank you for joining us today. OMV recently announced that it received an arbitral award concerning irregular gas deliveries from Gazprom Export. How does this impact your current business operations?
**Alfred Stern:** Thank you for having me. The arbitral award of EUR 230 million, along with the interest and costs, is indeed a significant development for us. We are offsetting this claim against our payment obligations under the Austrian gas supply contract with Gazprom. While this may potentially disrupt our Russian gas supplies, we are well-prepared for any interruptions.
**Interviewer:** Can you elaborate on the preparations OMV has made to mitigate the risk of interrupted gas supplies from Russia?
**Alfred Stern:** Certainly. We have diversified our gas supply sources and established alternative supply routes. Our gas storage facilities are currently over 90% full, and we have increased our availability of gas from Norway and liquefied natural gas (LNG). This means we can fulfill our contractual obligations to our customers even if Gazprom were to cease deliveries.
**Interviewer:** You mentioned past irregularities in deliveries from Gazprom Export. How have those experiences shaped OMV’s current strategy regarding Russian gas?
**Alfred Stern:** The cessation of deliveries in Germany in September 2022 highlighted our vulnerabilities. Since then, we’ve reduced our dependence on Russian gas significantly. Our strategy now is to further diversify our sources and minimize reliance on any single supplier. The current situation is an opportunity for us to potentially withdraw from our long-term supply contract if Gazprom were to breach it by stopping deliveries.
**Interviewer:** What would be the financial implications for OMV if Gazprom does stop deliveries in response to the arbitral award settlement?
**Alfred Stern:** While there may be some small one-off hedging losses if deliveries are halted, these would be clearly outweighed by the damages we have been awarded. Our goal is to ensure stability and security for our customers, and this damage award supports that aim by helping us recuperate some financial losses we incurred last year due to irregular supplies.
**Interviewer:** So, you’re confident that OMV can maintain its supply commitments regardless of Gazprom’s actions?
**Alfred Stern:** Absolutely. We have strategized for various scenarios, including a full cessation of Russian gas supplies. With our current storage levels and diversified supply sources, we are in a strong position to continue meeting our obligations and serving our customers effectively.
**Interviewer:** Thank you for your insights, Mr. Stern. It’s clear that OMV is taking proactive steps during these challenging times in the energy sector.
**Alfred Stern:** Thank you for having me. We are committed to ensuring energy security and will continue to adapt to the market dynamics as they evolve.