Austrian vitality group OMV will flip the web page from its embrace of Russia and will sign a gradual exit from its oil and fuel enterprise when it presents its technique below new Chief Government Alfred Stern on Wednesday.
After Stern took over as CEO final 12 months, the plastics engineer introduced the most important change in OMV’s historical past – a shift to specialty plastics constructed round its blockbuster buy of petrochemical group Borealis.
A spin-off of the oil enterprise will not be deliberate, and a sale of OMV’s majority stake in Romanian group Petrom can also be unlikely, however Romania might achieve strategic significance as the corporate plots a greener, extra sustainable path.
Austria’s largest industrial group joins oil giants BP BP.L and Shell SHEL.L in steadily saying goodbye to grease and fuel, however not like them it’s specializing in plastics, biofuels, and the round financial system quite than renewable vitality.
It stays to be seen, nonetheless, how shortly Austria’s largest CO2 emitter can full the transformation with out taking extreme financial losses.
It has mentioned that no extra oil and fuel can be produced by 2050 on the newest. That timetable appears unambitious however analysts say a fast exit is unlikely given excessive vitality costs at a time when it must finance its restructuring.
What is definite is that Russia will now not be a core area after Moscow’s assault on Ukraine.
It is a sharp reversal from the technique of Stern’s predecessor, Rainer Seele, a German who cultivated shut contacts with Russia as head of oil and fuel firm Wintershall and at OMV brokered a number of offers with Gazprom GAZP.MM.
Since Russia’s invasion of Ukraine, OMV has mentioned it’s going to now not spend money on Russia and is exiting its 25% stake within the Yuzhno Russkoye fuel subject it purchased from Germany’s Uniper for 1.7 billion euros ($1.87 billion). It additionally faces successful of as much as 1.8 billion euros from disengaging in Russia, together with the halted Nord Stream 2 pipeline it helped finance.
OMV shares have misplaced about 16% for the reason that outbreak of the warfare, dropping to round 42.29 euros.
Erste Group analyst Tamas Pletser mentioned the warfare in Ukraine might galvanise Romania to approve a brand new offshore legislation that would pave the way in which for the Neptune fuel challenge within the Black Sea. OMV, which has a 50% stake by way of a subsidiary, has not but given the inexperienced gentle for the challenge, whose potential is estimated at 50 billion cubic metres of fuel.
($1 = 0.9098 euros)
(Reuters – Writing by Michael Shields; Enhancing by Susan Fenton)