Russia will no longer be a core region, said OMV
OMV no longer pursues investments in Russia. (Credit: DanielZanett)
“The war in Ukraine is a tragic and perilous situation that is causing great suffering for many and that we view with the utmost consternation. Our deepest sympathies go out to all of the direct and indirect victims of Russia’s military action. We call for the end of all hostilities. It is only in peace that there can be freedom and wellbeing”, said Alfred Stern, Chairman of the Executive Board and CEO of OMV.
In light of the latest developments, OMV is reevaluating its engagement in Russia. While Russia has been one of the core regions in OMV’s Exploration & Production portfolio, the Executive Board has taken the decision not to pursue any future investments in Russia. Furthermore, a strategic review of its 24.99% interest in Yuzhno Russkoye will be initiated. This review comprises all options including possibilities to divest or exit. As a consequence, OMV expects value adjustment of EUR 0.5 – 0.8 bn (as of December 31, 2021). This non-cash value adjustment will impact the reported Operating Result in the first quarter of the current financial year. With this, OMV reduces its net asset value in Russia (remaining Yuzhno Russkoye value) to around 2% of OMV’s total fixed assets and at-equity participation value.
OMV has already ended all negotiations with Gazprom about the potential purchase of a 24.98% stake in blocks 4A/5A of the Achimov-Formation in the Urengoy gas and condensate field and the Basic Sale Agreement from October 3, 2018 has been cancelled.
In addition, OMV will recognize a value adjustment charge of EUR 987 mn (loan plus accrued interest as of December 31, 2021) due to the fact that receivables from Nord Stream 2 AG may be unrecoverable. This is a non-cash value adjustment that will impact reported Earnings before Taxes in the first quarter of the current financial year.
OMV takes its responsibility to supply Europe and Austria with natural gas seriously. Households, institutions, and the industrial sector rely on dependable gas supplies, including gas from Russia which is supplied under longstanding contracts. OMV is working to identify and develop additional sources of supply.
OMV will ensure compliance with all applicable sanction regulations and legal provisions at any moment.
Source: Company Press Release