The Austrian oil and gas group OMV announced on Wednesday evening the termination of its contract with the Russian giant Gazprom, initially entered into in 1968, following the interruption of deliveries by Moscow. “OMV terminates its long-term natural gas supply contract with Gazprom Export with immediate effect”indicated the company in a press release, justifying this decision by the “multiple violations observed of contractual obligations”. The contract in question, renewed in 2006, was to run until 2040.
This is a turning point for OMV, the first Western company to have signed a delivery contract with the Soviet Union in 1968. Since November 16, Russia has no longer supplied gas to Austria, which put an end to almost six decades of dependence on the Alpine country, which still imported 90% of its gas from Russia this summer, notably via Ukraine.
Diversification
The company, almost a third owned by the Austrian state, previously received “around 7,400 megawatt hours per hour, or around 5 terawatt hours per month”. This decision by Gazprom was taken in reaction to the announcement by OMV of an arbitration judgment giving it the right to claim 230 million euros in compensation for past supply problems. According to its CEO Alfred Stern, the diversification strategy implemented makes it possible to guarantee security of supply for customers and to honor all orders.
The group explains that it can rely on “its own gas production in Norway and Austria, the production of third parties as well as additional volumes of liquefied natural gas (LNG)”. In retaliation after the launch of the Russian offensive against Ukraine in February 2022, the European Union, historic buyer of Russian hydrocarbons, said it wanted to free itself from all natural gas coming from Russia by 2027. If it has considerably increased its purchases of American LNG, it has not succeeded in completely cutting the energy link with Moscow.
