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.
**Interview with Alfred Stern, CEO of OMV**
**Interviewer:** Thank you for joining us today, Alfred. OMV recently won a €230 million arbitration award against Gazprom. Can you explain what this decision means for OMV and its operations?
**Alfred Stern:** Thank you for having me. The arbitration ruling is a significant milestone for us, particularly in light of the irregular deliveries we faced from Gazprom in September 2022. The awarded damages will help us mitigate the financial impact we suffered during that time. However, we are also bracing for the possibility that Gazprom might decide to halt gas deliveries in response, which we’ve communicated to the market.
**Interviewer:** You mentioned potential interruptions in deliveries. How prepared is OMV to handle this situation?
**Alfred Stern:** We believe we are well-prepared. Our gas storage facilities are currently over 90% full, and we have established alternative sources of supply, primarily from Norway and liquefied natural gas (LNG). We are confident that we can meet our customers’ contractually guaranteed volumes even if interruptions occur from Gazprom.
**Interviewer:** There seems to be a shift in OMV’s dependency on Russian gas. Can you elaborate on that?
**Alfred Stern:** Yes, we are actively reducing our dependency on Russian gas. While we’re still bound by our long-term supply contracts, we’ve made significant progress in diversifying our sources. In fact, if Gazprom were to cease supplies altogether, this could provide us with a legal basis to withdraw from those contracts, which have become increasingly unpopular.
**Interviewer:** How could this ruling influence future energy sourcing and your relationship with Gazprom?
**Alfred Stern:** The ruling could fundamentally alter our relationship. If Gazprom stops deliveries, it may allow us to exit our current contracts and fully transition to non-Russian gas sources. This aligns with our strategic goals to ensure energy security and stability for our operations and customers.
**Interviewer:** considering the broader context of energy supply in Europe, what does this mean for OMV’s strategy moving forward?
**Alfred Stern:** Our strategy is clear: to enhance energy independence. We are focused on ramping up our alternative supply routes and leveraging LNG, which has become increasingly important given the geopolitical landscape. We are committed to ensuring our customers have reliable access to energy, regardless of the challenges posed by external suppliers.
**Interviewer:** Thank you, Alfred, for your insights on this pressing issue.
**Alfred Stern:** Thank you for having me. We are navigating through these challenges with a proactive approach to secure our energy future.
