Austrian energy group OMV expects more LNG deliveries will follow a first cargo Abu Dhabi National Oil Company (ADNOC) has agreed to supply for the winter season 2023-2024, its chief executive said on Oct. 28.

Like other European energy companies, OMV, which until the Ukraine war depended heavily on Russian oil and gas, is striving to diversify its supplies.

On Oct. 27, it said it had signed a memorandum of understanding with ADNOC, which Austria's chancellor said would lead to enough LNG for 65,000 households for one year.

"We have agreed that there will be at least this delivery, which means both sides' expectation is that we will expand on this," CEO Alfred Stern told broadcaster ORF. "For us, it is important that we diversify the gas supply for Austria, and this is a building block."

ADNOC's agreement with OMV follows a comparable deal with Germany's RWE.

High energy prices meant OMV, in which the Austrian state holds 31.5%, nearly doubled its core profit in the third quarter.

It posted clean current cost of supplies (CCS) earnings before interest and tax (EBIT), which exclude special items and inventory gains or losses, of 3.52 billion euros ($3.51 billion) after 1.79 billion euros the same time a year ago.

Analysts had expected CCS EBIT of 3.2 billion euros.

OMV said on Oct. 27 it would propose a special dividend of 2.25 euros per share for 2022 to be distributed at the same time as its regular dividend in 2023.

OMV's chemical and materials business, a major part of its growth strategy, posted a 66% decrease in its clean operating result in July-September after reduced demand and lower margins.

For some years, OMV has been shifting its growth focus towards high-quality plastics such as polyethylene, polypropylene and PVC, from oil and gas.

The strategy included integrating plastic-maker Borealis, in which it bought shares from Abu Dhabi state investor Mubadala for $4.7 billion in 2020. OMV CEO Stern previously headed Borealis.

Mubadala, which also holds 24.9% in OMV, agreed to sell a remaining 25% stake in Borealis to ADNOC in April.

Comments