It's up to Ukraine

OMV boss sees a way out of the Gazprom contract

It stands or falls with Ukraine - which has planned to cut off the flow of gas from Russia from 2025.

(Bild: PIXSELL / EXPA / picturedesk.com)

While Austria still obtains a very high percentage of the natural gas it needs from Russia, it is no longer dependent on the Russians, explains OMV CEO Alfred Stern. He also sees an exit option from the heavily criticized supply contract - but this depends on Ukraine.

In order to be able to withdraw from the gas supply contract with Russia, OMV wants to insist on strict compliance with the contract by the Russian Gazprom Group, Stern explained on Wednesday. "The place of delivery is the Slovakian-Austrian border", if Ukraine does not extend the gas transit contract with Russia, Gazprom will not be able to comply with the contract from the end of the year.

No longer dependent on Gazprom
"We have now been working for over two years to diversify our sources of gas and transport routes so that we are no longer dependent on these supplies from Gazprom," said Stern. "We can supply all our contract customers, even if the Russian gas doesn't come. We no longer have this dependency on the OMV side." Incidentally, OMV does not want the Russian gas at all. "As OMV, we have significantly reduced the quantities we purchase from Gazprom compared to before the war in Ukraine."

The legal dispute with Gazprom continues, but OMV boss Alfred Stern has an exit strategy.

(Bild: APA/Georg Hochmuth)

Discussions are mainly taking place via lawyers
Communication between OMV and Gazprom is now mainly taking place via lawyers, with several proceedings before arbitration courts. "We have had a dedicated legal strategy since the beginning of 2023, for over a year and a half, which serves to protect OMV's rights," says Stern. It will probably be possible to say more about this in the second half of the year. "It will certainly not be possible to enforce all arbitration awards, but there will certainly be the opportunity to implement various parts of them," says the OMV CEO.

Profit significantly increased
The OMV CEO was satisfied with the earnings figures presented today for the second quarter. "We achieved a clean CCS operating result (adjusted operating result, adjusted for valuation effects, note) of EUR 1.2 billion, which is 4 percent above the same quarter of the previous year." The operating cash flow of EUR 1.2 billion was approximately EUR 950 million higher than in the same quarter last year. Earnings per share after CCS amounted to EUR 1.51, up 5% on the same quarter of the previous year.

Major gas project to go into operation in 2027
The Neptun Deep gas project in the Romanian Black Sea is in the middle of implementation, Stern reported. "We have now awarded 90 percent of the implementation contracts." Drilling is still expected to begin in 2025 and go into operation at the beginning of 2027. "This is Europe's largest offshore project and will make Romania the largest gas producer in the EU and contribute to the EU's energy independence."

Production there will have very low CO2 emissions and be much more environmentally friendly than LNG. In June, OMV also acquired all shares in the Khan Asparuh oil and gas field in the Bulgarian Black Sea from Total Energies. "We will look for a strong partner there, as is customary in the oil and gas industry."