Next bombshell

OMV terminates gas contract with Gazprom

Gazprom has "fundamentally" violated the existing contracts, argues OMV.

(Bild: AFP)

After Russia's Gazprom stopped deliveries to Austria in mid-November, the next bombshell has now followed. OMV is now terminating the long-term supply contract with Gazprom.

"OMV Gas Marketing & Trading GmbH (OGMT) has just decided to terminate the Austrian supply contract with Gazprom Export (GPE) with immediate effect," according to a press release issued by gashub.at on Wednesday evening.

From the Group's point of view, Gazprom has "committed fundamental breaches of contract", as no natural gas deliveries have been made under this contract since November 16, 2024, 06:00 CET.

But Russian gas is still flowing
Gazprom had stopped deliveries to OMV after the Austrian oil company used an arbitration court ruling as an excuse not to pay 230 million euros to Gazprom. However, Russian gas has continued to come to Austria since then - just not under the terms of the contract between OMV and the Russian state-owned company and not directly to OMV. Instead, it was sold via the gas exchange - and could thus have come back to OMV, at least in part.

Exit hardly seemed possible until recently
OMV has been considering an exit from the long-term contracts for some time. Although the exact contents of the contracts are top secret, fixed supply volumes were agreed until 2040 under the chancellorship of Sebastian Kurz. For example, it was stipulated that the gas must be paid for in any case, even if it is not purchased. This contradicts the requirement of the Russia sanctions to phase out Russian gas quickly.

Until recently, the corresponding clauses seemed to make an exit almost impossible. However, the supply freeze has drastically changed the situation.

The conflict between the Russian energy giant Gazprom and OMV has become a central point of contention in European energy policy in recent years.

The far-reaching changes in the geopolitical landscape, in particular the Russian war of aggression against Ukraine, have severely strained relations between the two companies.