Without paying Gazprom, Austria's OMV dramatically improved operating income

In the fourth quarter of 2024, the Austrian OMV sharply improved its net operating income, as it did not pay for part of the Russian gas, which is why Gazprom stopped deliveries to the European company in mid-November. OMV stated that they had complied with the decision of the arbitration tribunal, which awarded compensation in a dispute with a Russian company.

In the fourth quarter of 2024, Austrian OMV significantly improved its net operating income (income less operating expenses) in the Energy sector. In October-December, it amounted to 1.64 billion euros. The company surpassed last year's figures by almost a quarter, and the previous quarter — by 60%.

"The result of the fourth quarter for gas and electricity increased to 268 million euros (98 million euros in the fourth quarter of 2023)," the latest quarterly report of the Austrian OMV says.

They noted that the increase in net operating income was mainly due to the decision of the Stockholm Arbitration in a dispute with Gazprom Export to award compensation of 230 million euros, which the Austrian company seized from the Russian in the form of gas without paying for it in November.

"After considering the related losses from hedging (insurance), the positive net impact of the arbitration award on the net operating result of the gas and electricity business in the fourth quarter of 2024 amounted to about 210 million euros," the document says.

Austrian OMV reports that in the fourth quarter it received 776 million cubic meters of gas from Gazprom, and on November 16 the Russian company stopped deliveries. The reason was the non-payment of the received fuel by the Austrian company.

OMV considered such a step by Gazprom to be a violation of the contract, which was supposed to end in 2040, and terminated the agreement.

"To mitigate the consequences of such a stoppage of gas supplies from In Russia, OMV has diversified its supply portfolio over the past three years and provided significant additional long-term transportation capacity to Austria. As a result, even without future gas supplies from Gazprom Export, OMV will be able to fulfill its obligations to supply its direct customers. OMV continues to closely monitor developments and regularly assesses the potential impact of changes in gas flows on the Austrian gas market," OMV reports.

Earlier, in January 2023, OMV filed a lawsuit against Gazprom Export in Stockholm Arbitration demanding compensation for the termination of supplies under the German contract. Gazprom itself insisted that in the current conditions in Europe the proceedings would not be fair, and the Arbitration Court of St. Petersburg and the Leningrad Region banned OMV companies from conducting proceedings.

Nevertheless, it continued and in November the arbitrators issued a verdict of compensation of 230 million euros in favor of the Austrian company. Then OMV left the November payment to Gazprom as compensation, and the Russian company stopped the supply of Russian gas to OMV for non-payment. The Austrian company motivated its actions by the fact that it was the only option to receive compensation.

On December 11, OMV terminated the Austrian contract with Gazprom Export. And again filed for arbitration.

"On January 3, 2025, the Stockholm Chamber of Commerce ruled in favor of OMV in arbitration proceedings regarding the Austrian contract, awarding OMV compensation from Gazprom Export LLC," the report says. OMV clarified that the compensation should amount to 48 million euros.

Alexey Grivach, Deputy Director of FNEB, believes that in November OMV simply appropriated Gazprom's money.

"I'm not sure that this is a worthy reason for pride," the expert believes. In his opinion, in 2025, OMV's performance will deteriorate due to the need to fill UGS facilities at high prices.

After stopping the Ukrainian transit, which only Hungary and Slovakia, the cost of gas on European stock exchanges is above $ 500, and since last week it has been above $ 570.

As EADaily reported, over the past few years Gazprom has reduced gas supplies to Europe by about five times. The reason was counter-sanctions and sanctions. In the spring of 2022, because of them, Yamal-Europe stopped through Poland to Germany. Next, in May, Ukrainian transit decreased, as the Ukrainian GTS Operator stopped receiving gas at one of the two points, Sokhranovka. And at the end of August, the Nord Stream got up, which was then, on September 26, blown up by saboteurs in the Baltic Sea. The claim of the Austrian company was that supplies in 2022 were unstable and OMV had to purchase part of the gas on the stock exchange at a much higher price.