Austria Says Gazprom Contract Up to OMV as Blackmail Risk Abates

(Bloomberg) -- Austria’s top energy official said it’s up to OMV AG executives and shareholders whether to extricate the firm from a long-term Russian natural gas contract, now that it’s sufficiently guarded against what she described as potential blackmail over supplies.

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The supply deal signed in 2018, during Russian President Vladimir Putin’s last visit to Vienna, runs until 2040. Focus on the contract has increased since OMV won a €230 million ($242 million) arbitration decision against Gazprom PJSC, which promptly stopped delivering fuel after the Austrian company declared its intention to collect the settlement.

Austrian Energy Minister Leonore Gewessler, who supervises a commission probing the conditions under which the contract was signed, said her country has adequately diversified gas supplies away from Russia and that the next steps will be up to OMV. The firm’s chief executive officer declined to discuss the future of its contract during an interview last week.

“My job was to make sure that we are no longer dependent on an autocrat that tries to blackmail us with gas and gas prices,” she told Bloomberg Green’s Zero podcast at the United Nations climate talks convened in Baku, Azerbaijan. She added that OMV “will make its own economic decisions.”

Russian gas has powered Austrian industry and homes for some 56 years, but the energy crisis that ensued when Moscow cut supplies to Europe following its 2022 Ukraine invasion forced its partner to seek new suppliers. Even with Gazprom still covering about 80% of Austrian demand over the last year, OMV says it can meet all of its supply obligations through 2025 and beyond via alternative sources.

Such a large dependency on Russian gas supplies “should not be allowed to happen again in Austria,” said Gewessler, a Green Party politician who is likely to lose her ministry when a new coalition government is formed in the coming months. “We have to learn from that mistake.”

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