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.
**How does the recent arbitration award from Gazprom affect OMV’s financial outlook and future dealings with the Russian company?**
**Interview with Alfred Stern, CEO of OMV**
**Editor:** Today, we have Alfred Stern, the CEO of OMV, with us to discuss the recent developments surrounding the natural gas supply situation with Gazprom. Thank you for joining us, Alfred.
**Alfred Stern:** Thank you for having me.
**Editor:** OMV recently announced that it will offset the damages awarded by the International Chamber of Commerce against its payment obligations to Gazprom. Could you explain the implications of this decision?
**Alfred Stern:** Certainly. This decision stems from a long-standing issue surrounding irregular gas deliveries from Gazprom, which culminated in a total stoppage of supplies to Germany back in September 2022. By choosing to offset this arbitration award, we are prepared for the possibility of Gazprom halting deliveries to us. However, I want to reassure our customers that we have alternative supply arrangements in place, particularly with gas from Norway and LNG sources.
**Editor:** Speaking of alternative supplies, how well prepared is OMV to handle a potential interruption in gas deliveries from Gazprom?
**Alfred Stern:** I can confirm that our gas storage facilities are currently over 90 percent full. We’ve strategized effectively to ensure we can meet our contractual obligations to supply our customers, even if there’s an interruption from Gazprom. This preparation includes securing additional delivery capacities from other sources, which significantly diversifies our supply chain.
**Editor:** You mentioned that OMV is no longer dependent on Russian gas. Could you elaborate on this statement?
**Alfred Stern:** Yes, that’s correct. Over the past months, we’ve significantly reduced our reliance on Russian imports. While we still have long-term contractual obligations for Russian gas, we have been actively seeking other suppliers. If Gazprom were to stop deliveries in retaliation for our current decisions, it would allow us to potentially exit these contracts, especially given the ongoing concerns about contractual compliance on their part.
**Editor:** The recent arbitration award is substantial. How do you expect it to impact OMV financially?
**Alfred Stern:** The award is indeed significant and will help mitigate the financial impacts we’ve faced due to previous supply disruptions. While we may face some one-off hedging losses if Gazprom ceases supplies, these losses are minor compared to the damages we received. Thus, it places us in a stronger financial position moving forward.
**Editor:** In light of the geopolitical tensions, how do you foresee the future of gas supply in Austria?
**Alfred Stern:** The landscape is certainly evolving, especially with the dynamics of European energy security. Our commitment is to reduce dependency on any single supplier while ensuring the reliability of gas supply for our customers. We are focused on diversifying our energy sources to create a resilient energy framework for Austria and broader Europe.
**Editor:** Thank you for your insights, Alfred. It’s crucial for consumers and investors to understand the energy supply landscape amidst these changes.
**Alfred Stern:** Thank you for having me. It’s important for us to communicate transparently as we navigate these challenges.
