OMV Announces Writedown Over Reduced Production and Failed Nabucco

Austria’s OMV AG announced that it would book a €55 million writedown in the wake of reduced hydrocarbon production and the failed Nabucco West pipeline project. OMV will book a one-time loss during the second quarter.

The company wrote that the hydrocarbon production fall is due to flooding in Austria, technical problems in Kazakhstan and unrest in Libya. Hydrocarbon production decreased globally by 2.62%. 

“This decrease was partly offset by higher quantities in Romania and New Zealand,” said the company in a statement.

The Trans-Adriatic Pipeline (TAP) has emerged as a winner in a long race, primarily against the Nabucco project, in a June 28th decision by the Shah Deniz Consortium. The result surprised at least a few as numerous off-the-record estimations by stakeholders concluded that both projects would be selected, or that an eventual delay on the decision was to be expected.

Austria, which as a country and through its main company OMV, wagered much on the Nabucco in its quest to be the natural gas hub of Europe, and effectively lost that chance and may have to rush to join the South Stream which aims to terminate its route in Italy.

Project Nabucco, with EU support led, was a company with four shareholders: Bulgarian Energy Holding (Bulgaria), Botas (Turkey), FGSZ (Hungary), OMV (Austria), Transgaz (Romania).