There are many myths surrounding OMV’s decades-long gas supply contract with Russia’s Gazprom. It has been on everyone’s lips since the Russian invasion of Ukraine and the energy crisis – even though very few people know its contents. That should change now.
So far, only the partly state-owned OMV knows the exact content of the contract, but not the government or the regulatory body E-Control. In addition to the long term, it is known that a ‘take or pay’ clause has been agreed: Gazprom supplies and OMV must pay, even if it does not need the gas.
Extended until 2040, well before the end of the term
The deal, which originally ran until 2028, was extended to 2040 in early 2018 in the presence of then ÖVP Chancellor Sebastian Kurz and Kremlin boss Vladimir Putin. The resulting heavy dependence on Russian gas became a problem for Austria, especially in times of war in Ukraine.
Gewessler: “Contract extension was a mistake”
“The contract extension in 2018 was a mistake,” Energy Minister Leonore Gewessler (Greens) said on Tuesday. It is now setting up a commission called the “Gas Independence Commission” to investigate the contract and shed light on it. Individual members should also gain insight into the gas deal.
The Commission must investigate whether there is a way to get out of the contract. In addition, the political circumstances surrounding the contract extension must be analysed. The chair will consist of the former President of the Supreme Court, Irmgard Griss, and the university professor Andreas Kletečka. The first results should be available in the autumn and a final report should be available by the end of the year.
“The Commission will look at the contract and think: how is it possible to get out of these obligations?” Griss said. A second question the Commission wants to answer is: “How do we continue in the future with contracts that are concluded by a private company, but which have a huge impact on the economic and security situation and generally on living conditions in Austria?” the former OGH president said.
“That’s not what private law is for”
In the case of the gas supply contract, “essential aspects of energy policy and foreign policy” would be regulated by private law, Kletečka said. “That is not what private law is for. You need to find a structure for how to do it differently in the future.”
Illustrious committee of experts
The committee will conduct interviews and analyze available information on the 2018 contract extension. Other members of the committee include former head of the Federal Competition Authority Walter Barfuß, former E-Control board member Walter Boltz, Wifo boss Gabriel Felbermayr, former AGGM board member Thomas Starlinger and Velina Tchakarova, former director of the Austrian Institute for European and Security Policy.
Strict security measures for contract inspection
Of course, the Commission will only have access to the contracts under strict security measures and in accordance with the legal requirements of the EU’s “Gas SOS Regulation”. The Commission will protect OMV’s business secrets and is “not responsible for investigating the business decisions”, Gewessler stressed.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
