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OMV reserves its rights over Russian decree on its assets

Published 20/12/2023, 13:56
© Reuters. FILE PHOTO: The logo of Austrian oil and gas group OMV is pictured at the rooftop of its headquarters in Vienna, Austria May 12, 2020. REUTERS/Leonhard Foeger/File Photo
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FRANKFURT (Reuters) - Austrian oil and gas company OMV on Wednesday said it is examining the impact of seizure of its shares in the Yuzhno-Russkoye gas field and reserves its rights, after Russian President Vladimir Putin ordered that its stake be transferred.

According to the decree, OMV's shareholdings and its interests in the gas field are to be transferred to new Russian companies.

"OMV is currently reviewing the presidential decree and may take further steps to preserve its rights," OMV said in a press release.

The partly state-owned firm said it had learned that the Russian companies would be ultimately held by the insurance company JSC SOGAZ and Gazprom (MCX:GAZP).

"The proceeds from the transfer of the OMV interest to JSC SOGAZ are to be paid into a special account," it said.

SOGAZ provides insurance to Gazprom.

OMV said it value-adjusted in 2022 its 24.99% holding in the gas field in Western Siberia and expected no further negative effects on its results.

A review initiated at that stage of the Yuzhno-Russkoye shareholding included all options, including a sale or exit.

Operating results, cash flows and production of the Russian businesses were no longer included in the group report as per a consolidation method launched on March 1, 2022, OMV said.

This value adjustment also included receivables from its capital investor role, alongside other western companies, in Nord Stream 2, a Gazprom-led pipeline that was completed but never started operating.

© Reuters. FILE PHOTO: The logo of Austrian oil and gas group OMV is pictured at the rooftop of its headquarters in Vienna, Austria May 12, 2020. REUTERS/Leonhard Foeger/File Photo

OMV took hits to its core profit due to hedging losses incurred from volatile gas supply from Russia.

Amid uncertainty regarding future deliveries from Gazprom, OMV started sourcing liquefied natural gas (LNG) to diversify away from Russia, and strengthened renewable energy investments.

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