OMV CEO Alfred Stern does not see oil and gas as a growth market in Europe – but it will still be possible to fill up with petrol and diesel at OMV in the future, and natural gas will also continue to be required. “Of course you can ask OMV, exit oil and gas today. I can close my refinery tomorrow, I can plug all drill holes – then OMV will also be gone”, Stern told APA. However, generate the OMV 1,6 percent of Austria's gross national product.
Sales plans for Malaysia and New Zealand
But where OMV wants to get out again soon, that's the oil- and gas exploration and production (E&P) in Malaysia and New Zealand. The interest of potential buyers is currently being explored here, said the OMV boss. OMV produces in the Asia-Pacific region 59.000 boe (barrels of oil equivalent) per day, these are round 15 percent of OMV total production of 392.000 boe per day.
You have found, “that we see no possibility, somehow bring the gas from there to our core markets in Europe”. OMV follows the strategy, Oil and gas not only to produce and sell, but also to process it yourself.
Exit from Russia
Stern would also like to exit the stake in the Russian gas field Yuzhno-Russkoye, which have already been almost completely written off. “But to be able to sell something, you have to find someone, who also wants to buy it and is allowed to buy it.” For this you need the appropriate permits in Russia.
“This is currently extremely difficult due to the legal situation.” Demands for an immediate withdrawal from Russia testify to one thing for Stern “very simplified understanding of the law. As OMV boss, I could tear up these contracts here in Vienna, for example, but that doesn't change the fact, that we are still involved there.”
That OMV continues to purchase natural gas from Russia due to the existing supply contracts, may be “sanction- and compliant with the law”, stressed Stern. “The fact is, that gas has not yet been subject to sanctions. We don't have the luxury, Reject gas from legitimate sources of supply – especially too, when we have contracts, which oblige us to accept.” The situation is different with petroleum: Russian oil had already been removed from the OMV refineries before the sanctions came into effect and no Russian oil products such as diesel were imported either.
No Disclosure of Contracts
The OMV boss has no understanding for the repeated demand for disclosure of the supply contracts with the Russian Gazprom group. “The gas contracts are contracts under private law, die – as is usual with such contracts – contain a confidentiality clause. This means, if we as OMV unilaterally disclose such contracts, then we will be in breach of contract.”
The OMV supervisory board is informed about the content of the contracts, but just like the board of directors are committed to confidentiality. The Austrian state is with 31,5 percent stake in OMV, According to the Stock Corporation Act, however, all owners must be treated equally and therefore no exceptions can be made and only some of the owners can be informed about the content of the contracts.
Additional gas could come from the Black Sea in the future, where as reported by the summer, the investment decision on the “Neptune”-project should fall. “So, how it looks at the moment, is this Neptune gas field big enough, that, in addition to the other sources of production, Romania may have a surplus of gas and could also export it.” This gas could e.g. transported to Austria via Slovakia. The total investment volume is around 4 Mrd. amounted in euros, OMV is involved in the project through its subsidiary OMV Petrom 50 percent involved.
In the longer term, however, OMV is focusing on renewable energies, because the area is growing particularly fast. “We want to move towards sustainable fuels, Develop chemistry and materials. However, as an integrated company, we will continue to be active in three areas: Energy, Fuels & Feedstock und Chemicals & Materials”.
With Wien Energie you have a geothermal joint venture for district heating in Vienna. Last year, a large photovoltaic project was carried out in Romania together with the state electricity supplier Oltenia 450 megawatts of power announced.
The level of gas prices will remain permanently high, says the OMV boss, since the cost of LNG is higher than that of pipeline gas. Demand from Asia was relatively low last year, because China was in lockdown, “but if that demand comes back, will of course lead to this, that market prices will go up in global competition”.
Recently, gas prices have fallen again, “but with 40 euros per megawatt hour, we are still twice as high as before the Ukraine war”.