Gazprom, OMV Sign MoU on Co-operation

Russian export monopoly Gazprom and Austria's incumbent gas supplier OMV are to co-operate in gas production and supply, training practices and cultural activities in the form of a strategic agreement, they said late October 4 at a gas conference in St Petersburg.

It is small compensation for not being able to use the conference to announce their Russian-Norwegian asset swap, settling instead for an agreement whereby OMV will simply buy Russian upstream production assets at a price yet to be determined.

They are now instead to set up a joint co-ordinating committee on collaboration. “Today, we continue to work toward the strengthening of Russian-Austrian relationship in the gas sector in the long term. With the newly-signed memorandum, we will consolidate our joint activities with OMV in the areas of ongoing and potential co-operation into a single co-ordination centre and bring it to a brand-new level,” said Gazprom CEO Alexei Miller.

His counterpart Rainer Seele said: “We have already been receiving reliable gas supplies from Russia for more than 50 years. Thanks to our strong partnership with Gazprom, Russia has become one of our main partner countries, and now I am delighted that we are able to take a further step together. We will continue to expand our successful existing relationship not only at an economic level, but also on a cultural and social level."

OMV apparently came under pressure from Norway to drop the swap idea, as the petroleum ministry was opposed to reducing competition for gas in Europe. It would rather not have the largest European supplier producing and selling its gas on its shelf, the energy minister told Reuters in May this year.

The swap was first announced in December 2016, but OMV had not submitted to the energy ministry its application to exchange a share of its assets with Gazprom at least by the time of the interview, the minister said, suggesting that OMV was waiting for some encouragement before it did so.