Excessive oil and gasoline costs: OMV doubles its earnings

OMV doubled its gross sales and earnings within the first half, though Gazprom doesn’t ship the contractually agreed portions. Fuel price 1.5 million was saved.

Though the Russian group Gazprom doesn’t at the moment ship the contractually agreed portions of gasoline, “within the present state of affairs, we’re fairly able to supplying our prospects and persevering with to retailer them”, underlines Alfred Stern, boss of OMV . For the subsequent gasoline 12 months, not solely has line capability been secured, but additionally the gasoline to fill these traces, Stern mentioned. Fuel price 1.5 billion euros has already been saved.


Russia breaks the treaty, silence on the results


“In Germany, deliveries by way of Nord Stream 1 are lowered to twenty% of regular portions. 40% of regular deliveries arrive in Austria,” Stern mentioned. “It is greater than handed throughout this common overhaul of the Nord Stream 1 gasoline pipeline, however lower than what was truly delivered as a common rule,” defined the boss of OMV. “We’re contractually entitled to bigger supply portions.”


There are contractual mechanisms to compensate for every day or periodic fluctuations, “nonetheless, these laws at the moment are greater than exhausted”. Stern wouldn’t say if any penalties are contractually stipulated for this case, or if OMV intends to demand compensation from Gazprom.

Nonetheless, the gasoline provide in Austria is safe, Stern careworn. OMV’s gasoline storage amenities, which account for round 1 / 4 of the storage capability in Austria, are already greater than 80% full. OMV at the moment has pure gasoline saved for a worth of 1.5 billion euros.


These storage volumes can be utilized by numerous Austrian and worldwide corporations, comparable to industrial corporations or gasoline merchants. OMV additionally saved its personal storage volumes because it additionally acts as a gasoline dealer out there. These portions of gasoline can be delivered in response to the contractually agreed situations. “If a real emergency arises, different mechanisms will after all come into impact, however these are not inside OMV’s scope of determination.”


Alternate options to Russian gasoline


OMV additionally produces pure gasoline in Austria itself, “which accounts for about 7% of Austria’s gasoline wants,” Stern defined. As well as, not solely the transmission capacities from Germany and Italy to Austria have been secured at 40 terawatt hours (TWh) for the subsequent gasoline 12 months (October to September), but additionally the portions of gasoline to make use of these skills. On the one hand, OMV produces gasoline itself in Norway, the place it’s concerned in gasoline fields. As well as, the corporate has provide contracts with Norwegian gasoline firm Equinor, long-term capability on the LNG terminal in Rotterdam and a longer-term contract with Qatar to carry liquefied gasoline to Rotterdam. “These 40 TWh are essential as a result of we will use them to cowl all of the OMV supply obligations that we truly provide at the moment from Gazprom contracts.”

earnings doubled


Within the first half of the 12 months, OMV largely benefited from uncertainty and excessive oil and gasoline costs, roughly doubling its gross sales and earnings. Within the second quarter, CCS’ personal working revenue (adjusted for stock results) reached a report results of 2.9 billion euros, in comparison with 5.6 billion euros within the first half. Earnings per share (EPS) additionally doubled within the first half, from EUR 3.90 to EUR 7.63. The three segments contributed to this good revenue state of affairs, specifically the oil and gasoline sector, but additionally the refining exercise and the chemical compounds and supplies sector.


3.7 billion investments wanted


In response to Stern, OMV operates in a cyclical market surroundings. In the course of the Corona 12 months 2020, Brent oil costs had been regular beneath 25 {dollars} and gasoline costs beneath 10 and even 5 euros per MWh. “We might want to make investments round 3.7 billion euros this 12 months with the intention to proceed to keep up the availability of our merchandise.”


For this 12 months, OMV expects a median value of Brent crude oil of greater than 100 US {dollars} per barrel, till now an oil value of 95 {dollars} had been assumed, final 12 months it averaged 71 {dollars} per barrel (159 liters) . The typical gasoline value for this 12 months needs to be round 45 euros per megawatt hour (MWh), after 16.5 euros per MWh final 12 months. “These are the gasoline costs achieved by OMV”, in spite of everything, we aren’t solely energetic in Europe, however internationally, the place gasoline is marketed at native costs.


OMV’s whole oil and gasoline manufacturing has fallen 19% this 12 months to 400,000 barrels per day. On the one hand, that is defined by the sale of E&P actions in Kazakhstan and oil belongings in Malaysia, in addition to decrease manufacturing volumes in sure international locations comparable to Romania, New Zealand and Libya. Above all, since March, OMV not contains its industrial actions in Russia within the Group’s key working figures. Stern expects OMV to provide about 390,000 barrels of oil and gasoline per day all year long. In Libya, manufacturing had been held again by unrest, and manufacturing can now be elevated once more.


Refineries are seeing very sturdy demand, the refining margin for this 12 months is estimated at $15 a barrel. Repairs to the Schwechat refinery needs to be accomplished by the tip of September or October. The refinery is at the moment nonetheless working at about 20%, and gas has additionally been bought in the marketplace, which is now transported to Austria by rail, highway and water. As well as, the federal government launched short-term gas reserves. “With that, we now see a secure provide state of affairs.” Additional reserve releases will not be at the moment being mentioned.

AK to Greenpeace asks for a particular tax for OMV


The Vienna Chamber of Labour, the union-affiliated Momentum Institute and the environmental group Greenpeace accuse OMV of constructing “extreme earnings” and are calling for the introduction of a particular tax to skim off these earnings. Related allegations are additionally directed towards the group. The 2 partially state-owned corporations already pay a big a part of their earnings to the general public sector within the type of dividends. OMV is 31.5% owned by the Republic of Austria, whereas over 80% of Verbund’s shares are held by the general public sector or majority-owned corporations.


A attainable particular dividend, as within the case of the affiliation, is due to this fact additionally below dialogue, however this topic “is just not at the moment actively mentioned”, mentioned OMV chief monetary officer Reinhard Florey. OMV used a big a part of the funds to contribute to safety of provide in Austria. “Within the second quarter, we needed to improve our internet working capital by round 1.9 billion, and that is principally gasoline storage.” Because of this, no concrete concepts have been launched relating to a particular dividend, “however we additionally mentioned that we aren’t ruling something out right here”.

Verbund boss: Reducing electrical energy costs is just not attainable


Requested concerning the report earnings, Verbund boss Srugl informed the ‘Ö1-Journal um Acht’ that one would after all profit from ‘growing market costs’. As well as, you’re shifting as an organization within the power market and needed to make value changes. A shortfall to keep away from a rise in electrical energy costs is just not attainable. Particularly since “value formation on the inventory alternate” takes place. However not every little thing has been handed on to prospects. The value improve “is regulated within the provide contracts”.


The decoupling of gasoline and electrical energy costs “is smart”


Strugl considers it “basically sound” to decouple gasoline costs from electrical energy costs. In spite of everything, it’s a “gasoline value shock” that drives up the worth of electrical energy. The issue is exacerbated “when the water provide is poor, as it’s now” – the lacking quantities of electrical energy must be bought. Nonetheless, the decoupling should “happen in all European electrical energy markets” – if Austria had been to do it alone, “then this impact would die out instantly”. A budget electrical energy would instantly move to different markets, the Verbund boss continued.

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