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.
**2. How does the recent arbitral award against Gazprom affect OMV’s strategy for diversifying its energy sources?**
**Interview with OMV CEO Alfred Stern: Navigating Legal Challenges and Energy Supply Security**
**Interviewer**: Thank you for joining us today, Mr. Stern. OMV recently announced a significant arbitral award against Gazprom Export regarding your gas supply agreements. Can you elaborate on the implications of this decision?
**Alfred Stern**: Certainly, and thank you for having me. The arbitral award, which amounts to EUR 230 million plus interest, allows us to offset these damages against our ongoing payment obligations to Gazprom under our Austrian gas supply contract. While this could potentially lead to interruptions in Russian gas deliveries, we’ve taken proactive measures to mitigate any impacts on our operations and our customers.
**Interviewer**: Can you tell us more about how OMV is preparing for a potential supply disruption?
**Alfred Stern**: Absolutely. We have diversified our gas supply sources and now have robust arrangements in place for alternative supplies, particularly from Norway and liquefied natural gas (LNG). Currently, our gas storage facilities are over 90% full. This means that even if there were a disruption from Gazprom, we could still meet our customers’ contractually guaranteed volumes without major issues.
**Interviewer**: The dispute with Gazprom stemmed from irregularities in their delivery schedules, particularly the complete halt of deliveries to Germany last September. How has this experience shaped OMV’s future strategies?
**Alfred Stern**: The situation highlighted the risks associated with over-reliance on a single supplier. We’ve made significant strides to reduce our dependency on Russian gas. Although we’re bound by a long-term supply contract, should Gazprom cease operations in retaliation to the arbitration award, it would allow us to reassess our obligations and possibly withdraw from that contract, as it would place them in breach. This would be a significant turning point for OMV.
**Interviewer**: Given the current geopolitical tensions and the uncertainty surrounding gas supplies, what is your outlook for OMV and the European energy landscape?
**Alfred Stern**: We are cautiously optimistic. The European market is shifting towards more diversified energy sources. Our significant investments in non-Russian gas supply capabilities position us well for future challenges. While there’s a lot of uncertainty, OMV is committed to ensuring energy security for our customers and contributing to a more resilient energy landscape in Europe.
**Interviewer**: Thank you, Mr. Stern, for sharing your insights. It sounds like OMV is well-prepared to navigate the complexities of this evolving situation.
**Alfred Stern**: Thank you. We are confident in our strategy moving forward and appreciate the opportunity to discuss it.
