In difficulty and restructuring after the loss of business in Russia, the OMV Group is delaying investments in Romania

By RBJ
The Austrian group OMV became a major regional player in the field of hydrocarbons starting in 2004, after buying the Romanian company PETROM. Romania is the second country in Europe that has significant oil and gas deposits.
After buying PETROM, OMV quickly destroyed the related infrastructure of the Romanian company, namely PETROM’s petrochemical plants in Romania, insisting on easily obtaining large profits with very low investments. This policy continues today, the Austrians always playing on cheating their partner.
In the first nine months of 2022, OMV PETROM registered a profit of almost 2 billion euros, five times more than in the same period of 2021.
However, the Austrians do not want to open the budget for the most important investment in Romania, namely the extraction of natural gas from the Neptun area, from Romania’s territorial waters in the Black Sea.
Although the representatives of the Romanian state (which is the main minority shareholder) insisted that OMV PETROM and ROMGAZ (the shareholders of the Neptun perimeter) start the commercial extraction program, OMV officials procrastinate and procrastinate.
Today, at the meeting with the president of Romania, Klaus Johannis, the executive general director of OMV and chairman of the Supervisory Board of OMV Petrom, Alfred Stern was firm. He stated that OMV will honor its commitment to adopt the final investment decision in mid-2023.
Why just then?
Until now, OMV invoked the unfavorable legislation in Romania. This was resolved a long time ago. The Austrians have not changed their investment target in the Black Sea.
We have to emphasize that the main cause of this attitude is determined by the losses that OMV registers following the exit from the market of the Russian Federation. The press from Vienna shows that in the first quarter of 2022, the burden of adjustments as a result of the withdrawal from the Nord Stream 2 project and the loss of the Yuzhno Russkoye gas field affected OMV’s business by more than 2 billion euros.
On the other hand, OMV is going to restructure its activity, one of the objectives being that by 2050 the Austrian group will make an exit from oil and gas.
As an interim goal, oil and gas production will be cut by a fifth by 2030. Medium and long-term withdrawal from oil and gas will be financed with profits from oil and gas businesses. Crude oil production will be phased out by about 30% by 2030, and natural gas production by about 15%. In 2025, annual production is expected to be around 450,000 barrels of oil equivalent, and by 2030 it is expected to fall below 400,000 barrels per day.
After years of stalemate, Romania passed a long-awaited new offshore law this summer, which was seen as a major obstacle to the Neptun gas project. Tariffs were reduced and export restrictions were lifted. OMV Petrom estimates the potential at 50 billion cubic meters of gas. Plateau production is expected for the Company at 70,000 barrels per day.
OMV’s business goals do not seem to have anything to do with Romania’s interests.
This aspect does not seem to be well understood by the authorities in Bucharest. The only chance of starting the commercial extraction of gases from the Black Sea seems to be the nationalization of this activity and the sending of OMV in its business with Arab and Middle Eastern groups.