Image: (APA/GEORG HOCHMUTH)
“We have contractually secured non-Russian gas volumes – partly from our own production, partly from contracts with third parties,” said OMV boss Alfred Stern on Tuesday. “And we have now booked the pipeline capacities until 2028 to bring this to Austria.”
Unreliable and risky
Gas deliveries from Russia are unreliable and involve significantly more risk than in the past, said the OMV boss. That’s why they looked for and found other suppliers and transport routes. The pipeline capacities booked by OMV are gas pipelines from the West, not the Ukrainian capacities. “If necessary, we can always fully supply our customers with non-Russian gas quantities if necessary.”
In this way, OMV has made its contribution to security of supply. “We are the largest market player in Austria – albeit with a market share of 30 percent. We have now ensured that we can deliver this 30 percent at any time, even if these pipeline capacities there are lost.”
“OMV gas storage is practically full”
The OMV gas storage facilities are practically full, and the shipload of LNG from Abu Dhabi announced a year ago “will arrive in December,” said Stern. A five-year supply contract for 12 TWh of gas per year was signed with the state-owned Norwegian energy giant Equinor – Austria’s annual consumption is around 90 TWh.
According to Stern, negotiations with Abu Dhabi National Oil Company (ADNOC) regarding a possible merger of the chemical businesses of OMV’s plastics subsidiary Borealis and the Borealis joint venture Borouge are continuing, “with no results.” They are negotiating “a company where we would have equal shares with equal rights in a listed company.” It’s about that growth platform in the polyolefins sector, i.e. in a restricted chemical market segment.
Progress on the Neptune gas project
Progress is good on the Neptune gas project in the Romanian Black Sea, said the OMV boss. “The development plan for the Domino and Pelican South commercial natural gas fields has now been approved by the National Agency for Mineral Resources in Romania.” The project is now in the development phase with drilling activities and the development of natural gas production. “We have since concluded the largest engineering, procurement, construction, installation and commissioning service contract with a company Saipem worth 1.6 billion euros.”
Stern was satisfied with the business development in the third quarter. There was a significant slump at the operational level and in net income, but compared to an exceptionally good last year. In the first three quarters of this year, the extremely high oil and gas market prices of the previous year normalized.
Third quarter results
In the third quarter of the current financial year, adjusted CCS EBIT (smoothed for fluctuations in raw material prices) fell by 62 percent to 1.334 billion euros. The adjusted CCS net result fell by 64 percent to 431 million euros compared to the same quarter last year. However, the result of the third quarter was significantly better than that of the second quarter, said Stern. Operating cash flow (excluding net working capital) increased significantly to 1.9 billion euros. This is also due to many taxes and special items in the second quarter.
In the period from January to September, the CCS operating result before special items fell by 49 percent to 4.592 billion euros, while the CCS net result, at 1.928 billion euros, was 48 percent lower than in the same period last year. Earnings per share fell from EUR 2.55 to EUR 1.45 in the third quarter.
Due to the significantly lower market prices this year, group sales fell by 45 percent to 9.469 billion euros. For 2023, OMV expects an average Brent crude oil price of 80 US dollars (75.44 euros) per barrel (2022: 101 dollars) and an average realized gas price of around 30 euros per MWh (2022: 54 euros per MWh).
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