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OMV: From Soviet Assets to European Energy Transition Pioneer
I. Introduction & Episode Roadmap
The Vienna skyline tells many stories. From the baroque grandeur of the Belvedere Palace to the steel-and-glass towers of the modern business district, this city has long stood at the crossroads of empires—Ottoman, Habsburg, Soviet. But nestled among these monuments to history sits the headquarters of a company whose story may be the most Austrian of all: OMV Aktiengesellschaft, an energy giant born from Cold War compromise, shaped by Russian gas pipelines, and now racing to reinvent itself for a decarbonized future.
As of 2024, OMV is a prominent entity on the Vienna Stock Exchange, with a market capitalization nearing EUR 12 billion, positioning it as one of Austria's largest listed industrial firms. In 2024, the company reported revenues of EUR 34 billion and employed approximately 23,600 individuals worldwide. These are impressive numbers, but they only hint at the extraordinary journey that brought OMV to this moment.
OMV, formerly an abbreviation for Österreichische Mineralölverwaltung Aktiengesellschaft, is an integrated company with three robust pillars: Chemicals, Fuels & Feedstock, and Energy. It supports the transition to a lower-carbon economy and has the ambition to become a net zero emissions business by 2050 for Scope 1, 2, and 3 emissions.
The central question animating this analysis: How did a company born from Cold War geopolitics become a pioneer of the European energy transition? The answer involves Soviet diplomats and Austrian neutrality, Romanian oil fields and Black Sea gas reserves, a controversial bet on Gazprom, and a chemical recycling technology that might help solve the plastic crisis.
The firm has set out to transform itself into a sustainable fuels, chemicals, and materials company with a strong focus on circular economy solutions. Based on this new strategy representing the most fundamental strategic shift in the company's history, OMV aims to become a net-zero emissions company by no later than 2050.
This is a story that spans seven decades and multiple continents—from the oil fields of Lower Austria to the shores of the Black Sea, from the trading desks of Abu Dhabi to the polyolefin plants of Texas. It's a story of strategic brilliance and costly miscalculations, of a neutral nation's uneasy dance with Russian energy, and of what it means to transform a traditional oil and gas company for a decarbonized world.
The narrative unfolds in five transformational moments: the birth of the company from Soviet occupation, the Petrom acquisition that made OMV a regional champion, the Neptun Deep discovery that could make Romania the EU's largest gas producer, the Borealis mega-deal that pivoted OMV toward chemicals, and Strategy 2030—the most fundamental strategic shift since the company's founding.
II. Origins: Cold War Austria & The Birth of Energy Independence
The Geopolitical Context
Picture Vienna in 1955: a city divided into four occupation zones, its citizens navigating checkpoints between sectors controlled by American, British, French, and Soviet forces. Germany to the north had been cleaved in two, apparently forever. Austria faced the same fate—unless its leaders could thread an almost impossibly narrow diplomatic needle.
The breakthrough came with the Austrian State Treaty, signed on May 15, 1955, at the Belvedere Palace. The Austrian State Treaty established Austria as a sovereign state. It was signed on 15 May 1955 in Vienna, at the Schloss Belvedere among the Allied occupying powers (France, the United Kingdom, the United States, and the Soviet Union) and the Austrian government.
The Soviet Union would not have agreed to the State Treaty if Austria had not committed to declaring neutrality after the allied forces had left the country. Since 1955, neutrality has become a deeply ingrained element of Austrian identity.
But the Soviets didn't leave empty-handed. They extracted something valuable: time to profit from Austrian oil.
The Soviet Transfer
During World War II, Austria's oil fields had been a strategic prize. 1934 Gösting 2 – the first commercial oil discovery. 1949 Development of the largest onshore oil field in Central Europe through the "Matzen Discovery Well", whose oil and gas resources are estimated at 2 billion boe. Full-scale commercial production began after the Anschluss in 1938, when the Germans strove to achieve maximum production for their military machine.
When the war ended, all known Austrian oil reserves fell within the Soviet zone of occupation. Production and refining were carried out by the Soviet Mineral Oil Administration (Sowjetische Mineralölverwaltung, SMV) or under its control.
The history of OMV began on 3 July 1956, when the company then known as "Österreichische Mineralölverwaltungs Aktiengesellschaft" was officially entered into the commercial register. Consequently, the Soviet Mineral Oil Administration (Sowjetische Mineralölverwaltung, SMV), a corporation formed during the Soviet zone of occupation in post-war Austria...
OMV traces its origins back to the period of the Austrian State Treaty of 1955, which re-established the country's independence. Established in 1956, Österreichische Mineralölverwaltung Aktiengesellschaft, later known simply as OMV, took on responsibility for the nation's oil and gas activities, including production, processing, and distribution.
This foundational ownership structure meant OMV had no individual private founders; the Austrian state was its sole proprietor from inception. The Austrian state initially held complete ownership of OMV. This was managed through Ă–sterreichische Industrieholding AG (Ă–IAG), the state holding company for nationalized industries.
Building the Foundation
The young company moved swiftly to establish national energy infrastructure. Ă–MV's first major project was the construction of the 1.66 million ton a year refinery at Schwechat, which was completed in 1960. The refinery replaced four refineries in the Vienna province with a combined capacity equivalent to that of Schwechat. By 1963, Schwechat's capacity had been raised to 2.5 million tons and to 4 million tons by 1964.
Early operations centered on upstream development in Austria, leveraging the Matzen field—discovered in 1949 and Europe's largest onshore oil accumulation. This domestic production base, combined with the new Schwechat refinery, gave Austria something rare in post-war Europe: energy security under national control.
For investors, the founding narrative matters because it established patterns that persist today. OMV was never a private entrepreneurial venture—it was a state project designed to secure national energy independence. This "strategic national asset" identity shapes government attitudes toward the company even now, influencing everything from regulatory treatment to merger discussions.
III. The Soviet Gas Deal: A Faustian Bargain?
In the summer of 1968, Soviet troops rolled into Czechoslovakia to crush the Prague Spring. That same summer, ironically, Austrian and Soviet negotiators were putting the finishing touches on a deal that would bind their countries together for decades to come.
The Republic of Austria became the first country in Western Europe to sign a gas contract with the Soviet Union. The initial amount of annual gas supplies – 142 million cubic meters – grew more than 64-fold in 50 years.
The oil and gas group OMV was the first company in Western Europe that signed the long-term contract to purchase the 'blue fuel' from USSR. On 1 June 1968, the contract was signed, and already on 10 September, 1968, first gas started to flow to Austria.
On September 1, 1968, the first Soviet gas crossed the Iron Curtain, nine days earlier than planned. This made Austria the first Western European country to get Soviet natural gas.
Austria's neutrality—the very condition that had freed it from Soviet occupation—now became a bridge across the Iron Curtain. While NATO countries maintained their distance from Moscow, neutral Austria could pursue energy trade without political complications. Or so it seemed.
The infrastructure buildout followed quickly. The Trans-Austria Gas Pipeline (TAG) became operational in 1974, connecting the Austrian natural gas hub at Baumgarten an der March, near the Slovakian border, to Arnoldstein in the south, near the Italian border. Austria became not just a consumer of Soviet gas but a critical transit hub for supplies flowing to Germany, Italy, and France.
Before the 2022 war, Austria got 80% of its natural gas from Russia, while 1/4 of all Russian gas deliveries to the EU flowing through the Austrian Baumgarten hub.
The relationship deepened over decades. Austria has maintained one of Europe's oldest and deepest connections to Russian energy, and in 2018 extended a long-term gas contract to 2040. State-owned OMV, the country's biggest fossil-fuel company, grew out of its post-World War II independence treaty that handed over Soviet-controlled energy assets in return for the nation's neutrality.
The 2018 contract extension would prove particularly fateful. The Russian supply contract had been due to end in 2028. OMV, taking the position that European gas demand would rise, extended the contract until 2040 with no exit clause.
In hindsight, this looks like a catastrophic miscalculation. But in 2018, the logic seemed unassailable. European gas production was declining. Russia had been a reliable supplier for fifty years. And OMV's leadership believed—like many in European energy—that integrating Russia into the European economy would moderate Moscow's behavior.
Mark Garrett, chairman of OMV's supervisory board, told shareholders in June 2022 that "[l]ooking back, we have to conclude that the investments made in Russia after 2015 were based on too much trust in Russia and Russia's role in the international community".
For investors analyzing OMV today, this history carries an important lesson: strategic decisions made decades ago can create path dependencies that constrain future choices. Austria's neutrality-enabled energy relationship with Russia brought decades of cheap, reliable gas—but also built a dependency that would prove extremely costly to unwind.
IV. Privatization & The 1990s Transformation
From State Champion to Public Company
By the mid-1980s, Austria's state-owned industrial sector was in crisis. The Ă–IAG holding company showed heavy losses and was draining public finances. But within this troubled portfolio, one company stood out as a consistent performer: Ă–MV.
At the end of 1987, 15% of OMV was privatized, making it the first public listing of a state-owned company in Austria. A further 10% was sold in 1989.
The privatization was gradual and strategic. The Austrian state never intended to fully relinquish control—OMV was too important for national energy security. But partial privatization brought several benefits: access to capital markets, exposure to market discipline, and a currency (shares) for acquisitions.
The 1990s brought rapid expansion. In 1990 the company opened its first filling station in Vienna. In 1998, OMV acquired a 25% stake in the plastics group, Borealis.
That Borealis stake—acquired for strategic integration into petrochemicals—would become the seed of OMV's most dramatic transformation two decades later.
Abu Dhabi Entry & International Expansion
The International Petroleum Investment Company (IPIC) of Abu Dhabi acquired an initial 19.6% interest in the group at the end of 1994. The following year, the group changed its name from "Ă–MV" to "OMV" because the umlaut on the "Ă–" is not commonly used in many languages.
The IPIC investment marked OMV's first significant outside shareholder beyond the Austrian state. It also established the Abu Dhabi relationship that would later evolve through Mubadala (which inherited IPIC's stake) and ultimately ADNOC—a partnership that defines OMV's chemicals strategy today.
The 1980s had already seen OMV's initial international ventures. Oil production commenced in Libya in 1985. The Burghausen refinery in Germany was acquired in 1987. The 1990s brought diversification into chemicals with the acquisition of Chemie Linz Group in 1990 and rapid retail expansion across Central Europe—Hungary, Czech Republic, Slovakia, Germany, and Italy.
This period established OMV's identity as a regional champion in Central and Eastern Europe, positioning it perfectly for the historic opportunity that would arise in 2004.
V. The Central & Eastern Europe Expansion: Becoming a Regional Champion
The Petrom Acquisition (2004) – Transformational Moment #1
The fall of communism in 1989 opened enormous opportunities across Eastern Europe. But it took fifteen years for the most transformational deal to materialize.
In 2004, OMV became the market leader in Central and Eastern Europe following the acquisition of 51% of Romanian oil and gas group Petrom which then constituted the largest acquisition in OMV's history.
In late 2004, Petrom was privatized by the Romanian state and sold to Austrian oil company OMV, which acquired of the previous SNP Petrom SA. As of 2005, it was the largest privatization deal in Romania's history.
The scale of the transaction was staggering. Austria's OMV AG has signed a contract to acquire 51% of the state-owned Romanian oil company, Petrom SA, through a combined direct purchase of 33.34% interest and a simultaneous increase in Petrom's stock. The purchase price for 33.34% was 669 million euro. Petrom's increased stock holding will cost up to 855 million euro.
With the closing of its acquisition of a majority stake in Petrom in December 2004, OMV has become the largest oil and gas group in Central Europe, with oil and gas reserves of around 1.4 billion boe, daily production of around 340,000 boe and an annual refining capacity of 26.4 million metric tons.
Petrom came with massive assets: Petrom has estimated oil and gas reserves of around 1 billion boe, refining capacity of 8 million metric tons and 600 filling stations.
The acquisition was controversial in Romania. The acquisition of 51% stake in Petrom was considered controversial as the privatisation contract was not made public and it consists of several disputed clauses. The privatisation allegedly produced a market monopoly. Critics say that OMV can use the resources Petrom owns until their exhaustion. Also fixing of tax for gas and oil exploration at 3 to 13.5 percent from the final delivery price for 10 years was criticised. Some critics claimed, that the price €1.5 billion was too low.
Whatever the controversies, Petrom transformed OMV. OMV Petrom is one of the largest contributors to the state budget, with approximately 42 billion euro in taxes and dividends paid between 2005 and 2023.
The Failed MOL Takeover & Turkish Expansion
Fresh from the Petrom success, OMV's appetite for expansion grew. In the early 2000s, OMV expanded into Eastern Europe, by acquiring around 10% of Hungarian oil company, MOL and in 2003 it acquired the upstream division of Germany's Preussag Energie.
The MOL stake was intended as a precursor to a full takeover. OMV increased its stake in Hungarian oil group MOL to 20.2% in 2007. OMV then sold its entire stake in March 2009 after MOL rejected a takeover bid in 2008 and the European Commission imposed tough restrictions for an approval of the deal.
The MOL defeat was OMV's first significant strategic setback of the 21st century—a reminder that even well-capitalized acquirers can't always get what they want.
In 2006, OMV acquired a 34% stake in a Turkish oil company Petrol Ofisi. In 2015 OMV increased its interest in Petrol Ofisi to 100%. Two years later, in 2017, OMV sold Petrol Ofisi to Vitol Group.
The Turkish adventure illustrates the challenges of geographic diversification. OMV spent nearly a decade building a 100% position in Turkey's largest downstream operator, only to divest entirely. The capital and management attention consumed by Petrol Ofisi could arguably have been better deployed elsewhere.
VI. The Black Sea Gamble & North Sea Push
The Neptun Deep Discovery (2012) – Transformational Moment #2
In 2012, a drill bit boring through the sediments of the Romanian Black Sea struck something extraordinary.
In 2012, the Domino-1 well in the Romanian Black Sea exploration license Neptun was the most significant discovery in that year, which has the potential to be OMV's most important gas discovery ever.
The first natural gas discovery was made in 2012 by the first deepwater well, Domino-1, during the first drilling campaign.
But turning discovery into production would take over a decade. Political uncertainty in Romania, including unfavorable offshore legislation, caused ExxonMobil (OMV Petrom's joint venture partner) to lose patience. ExxonMobil announced its decision to exit the project in 2019, citing the regulatory changes in the country and low oil and gas prices globally.
In 2019, ExxonMobil announced its plan to exit the Neptun Deep block and the company signed an agreement to sell its Romanian upstream affiliate, ExxonMobil Exploration and Production Romania, to Romgaz in May 2022 for more than $1bn. OMV Petrom became the operator of the Neptun deep offshore project in August 2022. OMV Petrom and Romanian natural gas producer Romgaz each hold a 50% interest in the project.
The project finally reached its investment decision in 2023. Neptun Deep, located in the Romanian Black Sea, to become one of the largest natural gas projects in the European Union. OMV Petrom, as operator, to develop gas project in a 50/50 partnership with Romgaz. Planned project investment totaling up to EUR 4 bn.
The Neptun Deep field is estimated to contain recoverable natural gas resources of approximately 100 bcm. The field is expected to produce eight billion cubic metres (bcm) annually for approximately ten years.
The project is progressing according to plan, with first gas estimated for 2027. Neptun Deep will contribute approximately 8 billion cubic meters annually to Romania's gas production once plateau production is reached.
The Statoil Acquisition (2013)
While the Black Sea story was developing, OMV made a major push into the North Sea.
On 31 October 2013, the acquisition deal with Norwegian Statoil containing participations in oil and gas fields and in development projects in Norway and the UK was closed. With US$2.65 billion, this then was the largest transaction in OMV's history.
The North Sea acquisitions gave OMV a diversified production base in one of the world's most stable operating environments. Norway's mature regulatory framework and transparent fiscal terms contrasted sharply with the political uncertainties OMV faced in Romania.
For investors, the combination of Norwegian production (reliable, low-risk, high-cost) and Romanian/Black Sea potential (higher-risk, but transformational upside) creates an interesting portfolio balance. Neptun Deep, if successful, will position Romania as the EU's largest gas producer—a remarkable prospect given Europe's desperate search for alternatives to Russian supply.
VII. Deepening the Russia Relationship: The Gazprom Entanglement
Strategic Partnership with Gazprom (2015-2018) – Transformational Moment #3
Under CEO Rainer Seele, who took the helm in July 2015, OMV doubled down on its Russian partnership. In 2015, the company made a resolution for strategic cooperation with Gazprom (asset swap). In 2017, the company acquired a 24.99% stake in the Yushno Russkoje gas field in West Siberia.
In 2017, OMV – together with ENGIE, Shell, Uniper and Wintershall – signed financing agreements with Nord Stream 2 AG to build the 1,200 km Nord Stream 2 gas pipeline from Russia to Germany.
The centerpiece of the strategy was the 2018 contract extension, binding OMV to Russian gas imports through 2040—just as geopolitical tensions between Russia and the West were escalating.
Governance & Compliance Concerns
Following Russia's 2022 invasion of Ukraine, OMV commissioned an independent audit of Seele's tenure.
According to the investigation report presented to and discussed by the Supervisory Board, the former Chairman of the OMV Executive Board, Rainer Seele, acted within the scope of his authorization when making changes to gas supply agreements in 2018.
However, the findings of the investigation also show negligence by the former CEO in the interpretation of OMV's strict compliance rules and code of conduct, which the OMV Supervisory Board does not tolerate. It was therefore right and important to initiate a comprehensive review of the allegations as a clear signal that behavior of this kind has no place in OMV.
OMV's agreement to sponsor Zenit was said to be worth 5mn euros per year for five years, starting in 2018. Seele also struck a controversial gas deal with Gazprom that year. The Russian supply contract had been due to end in 2028. OMV, taking the position that European gas demand would rise, extended the contract until 2040 with no exit clause.
The investigation found negligence but not actionable misconduct. Following an extensive discussion, the Supervisory Board has decided not to sue Rainer Seele for damages. The Supervisory Board therefore follows the recommendation of the legal experts and, as things stand today, will not instigate legal action.
The Seele era illustrates a recurring challenge in European energy: the tension between commercial logic (cheap, abundant Russian gas) and geopolitical risk. OMV's leadership believed they were securing long-term energy supply; critics argued they were enabling a regime that would later wage war on a European neighbor.
VIII. The Borealis Mega-Deal: Pivot to Chemicals
Majority Stake Acquisition (2020) – Transformational Moment #4
Even as the Gazprom relationship was deepening, OMV was executing a parallel strategy that would prove far more consequential.
Today, Borealis' owners OMV and Mubadala have agreed on the acquisition of an additional 39% share in Borealis by OMV for a purchase price of USD 4.68 billion. As a result, OMV will become the majority shareholder in Borealis in what is a strategic investment to grow in chemicals and accelerate the diversification of the company. Mubadala will retain a significant minority interest with a 25% shareholding.
OMV now holds a 75% interest in Borealis and Mubadala retains a 25% interest in the company. OMV is entitled to all dividends in relation to the additional shares in Borealis distributed after December 31, 2019.
The deal transformed OMV's identity. The purchase of a controlling majority in Borealis makes OMV a leading provider of polyolefins and base chemicals. The joint production capacities make OMV and Borealis the number one producer of ethylene and propylene in Europe and one of the top 10 polyolefin producers worldwide.
The transaction represents the biggest acquisition in OMV's history and the largest single transaction ever for Mubadala.
Rainer Seele himself framed the deal's significance: "This transaction is not just another milestone in the implementation of our strategy, but the biggest transformation in OMV's history."
The acquisition is a strategic extension of OMV's value chain into high value chemicals. This provides a natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV's exposure to volatile markets.
Critically, the Borealis deal positioned OMV for the circular economy opportunity:
Furthermore, OMV and Borealis will jointly expand their know-how and activities in the plastics circular economy. Borealis' activities in plastics recycling, through its subsidiaries EcoPlast (Austria) and mtm plastics (Germany), Project STOP (Ocean Waste) and the Design For Recycling (DFR) initiative are a perfect addition to OMV's ReOil® technology for the chemical recycling of post-consumer...
OMV has pioneered the proprietary ReOil technology, converting mixed plastic waste into pyrolysis oil for sustainable base chemicals. Borealis, with OMV's 75% stake, remains a leading Austrian innovator, filing 121 priority patent applications in 2024 and managing a portfolio of approximately 12,300 patents.
The chemicals business now operates through an impressive joint venture network. In Chemicals & Materials, OMV, through its subsidiary Borealis, is one of the world's leading providers of advanced and circular polyolefin solutions and a European market leader in base chemicals, fertilizers and the mechanical recycling of plastics. The company supplies services and products to customers around the globe through Borealis and its two important joint ventures: Borouge (with ADNOC, based in UAE and Singapore) and Baystar™ (with TotalEnergies, based in the US).
IX. 2022 Crisis: Ukraine Invasion & The Reckoning
The Shock
On February 24, 2022, Russian forces crossed into Ukraine. The geopolitical assumptions underlying fifty years of Austrian-Russian energy partnership collapsed overnight.
Today, the Executive Board of OMV has taken the decision not to pursue any future investments in Russia. Russia is no longer considered as one of the core regions in OMV's Exploration & Production portfolio.
As a consequence, OMV expects value adjustment of EUR 0.5 – 0.8 bn (as of December 31, 2021). This non-cash value adjustment will impact the reported Operating Result in the first quarter of the current financial year. With this, OMV reduces its net asset value in Russia (remaining Yuzhno Russkoye value) to around 2% of OMV's total fixed assets and at-equity participation value.
Russian Asset Seizure
In December 2023, Russia moved to formalize OMV's losses.
Austrian oil and gas company OMV on Wednesday said it is examining the impact of seizure of its shares in the Yuzhno-Russkoye gas field and reserves its rights, after Russian President Vladimir Putin ordered that its stake be transferred. According to the decree, OMV's shareholdings and its interests in the gas field are to be transferred to new Russian companies. "OMV is currently reviewing the presidential decree and may take further steps to preserve its rights," OMV said in a press release.
OMV said it value-adjusted in 2022 its 24.99% holding in the gas field in Western Siberia and expected no further negative effects on its results.
The Gazprom Arbitration & Gas Cutoff (November 2024)
The final break came dramatically. Gazprom stopped supplies to Austria early on November 16, according to the Vienna-based utility OMV, after OMV said it would stop payments for the gas following an arbitration award. OMV said it would stop paying for Gazprom gas to its Austrian arm to offset a 230 million euro ($242 million) arbitration award it won from...
OMV said it would stop paying for Gazprom gas to its Austrian arm to offset a 230 million euro ($242 million) arbitration award it won from the International Chamber of Commerce over an earlier cutoff of gas to its German subsidiary.
Austria's exposure had been extreme. Austria gets the bulk of its natural gas from Russia, as much as 98% in December last year, according to Energy Minister Lenore Gewessler.
But Austria had prepared. "Gazprom has proven once again today that Russia is not a partner," Gewessler wrote. Gewessler added that Austria had been preparing for this situation for a long time. "Our energy supply is secure. The domestic gas storage facilities are full. They currently contain more than one year of Austria's consumption," she said.
As part of OMV's ongoing diversification strategy, its portfolio of gas encompasses several supply sources from its own gas production in Norway and Austria, third-party gas producers, as well as additional long-term LNG volumes. OMV's gas storage in Austria is currently at around 85 percent. OMV is in a position to fulfil all of its customer contracts from alternative gas sources.
Since November 16, 2024, Gazprom Export has halted gas deliveries to OMV. Prior, OMV received approximately 7,400 MWh per hour, corresponding to approximately 5 TWh per month, at the Austrian Slovakian border.
The termination of Russian gas—after 56 years of continuous supply—marks the end of an era. For OMV, it validates the strategic pivot already underway.
X. Strategy 2030: The Biggest Transformation Since Founding
The Vision – Transformational Moment #5
Alfred Stern took over as CEO in September 2021, inheriting a company facing unprecedented challenges—and opportunities.
In its meeting today, the Supervisory Board of OMV Aktiengesellschaft appointed Alfred Stern (56) as the new Chairman of the Executive Board and CEO of OMV. Alfred Stern has accepted the appointment. He will assume the position with effect from September 1, 2021 for a three-year period with an extension option for further two years subject to mutual consent.
Stern's background is distinctively chemicals-focused. Prior to joining the OMV Group in April 2021 as a Board Member for Chemicals and Materials, he had been the CEO of Borealis since July 2018. During his tenure of 14 years, Stern held a series of other executive positions at Borealis, latterly as a Board Member for Polyolefins and Innovation & Technology.
He started his career at DuPont de Nemours, which led to extensive international experience in Switzerland, Germany, and the US across the spectrum of Research and Development, Sales and Marketing, and Quality and Business Management.
Mr. Stern holds a Ph.D. in Material Science and a Master's in Polymer Engineering and Science from the University of Leoben in Austria.
His appointment signaled OMV's direction: away from traditional oil and gas, toward chemicals and the circular economy.
In March 2022, just weeks after Russia's invasion of Ukraine, OMV launched Strategy 2030.
With our Strategy 2030 we strive to become an integrated sustainable chemicals, fuels and energy company — rooted in our firm commitment to achieving net-zero emissions by 2050.
The business segment Chemicals & Materials will be the growth engine of the company. It is to be substantially strengthened, expanded, and diversified, with the aim to establish a globally leading position in circular economy solutions.
As part of its new strategy, OMV aims to cut its oil and gas production by around 20% by 2030 and to stop oil and gas production for energy use by 2050.
The financial framework is disciplined. Following clear priorities in capital allocation – capex first, followed by dividend, inorganic growth, and deleveraging – investments of EUR 3.5 bn each year are planned to support organic growth. At least 40% has been earmarked for low-carbon projects. In the medium to long term, OMV is targeting a ROACE of 12% or more. The company aims to maintain a strong balance sheet, keeping its leverage ratio below 30% and a strong investment grade rating.
The strategy encompasses multiple growth vectors:
Sustainable Aviation Fuel: Sustainable aviation fuel (SAF) is a renewable alternative to conventional kerosene fuel that creates more than 80 percent less carbon emissions over its lifecycle. At our Schwechat refinery, we produce around 4,000 metric tons of SAF every year from used cooking oil.
Chemical Recycling: Our ReOil pilot plant has been up and running at the Schwechat refinery since 2018, accumulating over 29,000 cracking hours. We are currently expanding this technology with a new ReOil plant capable of processing 16,000 metric tons of plastics annually.
E-Mobility Infrastructure: OMV aims to expand e-mobility, targeting 5,000 fast and ultra-fast charging points by 2030 and the development of a network of EV chargers for heavy-duty vehicles.
Geothermal Energy: OMV is aiming for 3–4 TWh of renewable power and around 4 TWh of geothermal energy by 2030, with projects across Europe.
Carbon Capture: In Carbon Capture and Storage, OMV is targeting a capacity of 3 mn t of CO2 annually by 2030.
The Borouge Group International Merger
In March 2025, OMV and ADNOC announced a landmark transaction that will reshape the global chemicals landscape.
Signed agreement foresees strategic combination of Borealis and Borouge under the newly created company Borouge Group International, set to become world's fourth largest polyolefins company.
Under the terms of the transactions, Borealis and Borouge will be combined, with OMV injecting EUR 1.6 billion in cash - to be reduced by dividends paid out until completion - into Borouge Group International to equalize shareholdings.
The new company shall be a joint platform for OMV and ADNOC for potential growth acquisitions in the polyolefins sector and it is envisaged to be named Borouge Group International. OMV and ADNOC have also agreed on the key terms and conditions for a purchase by the joint venture company of all shares in NOVA Chemicals for a purchase price of USD 9.377 bn from Nova Chemicals Holding GmbH.
The Supervisory Board will have five representatives from OMV, five representatives from ADNOC and potentially five employee representatives according to Austrian corporate governance. Borouge Group International is expected to realize substantial annual synergies of around USD 500 million run-rate EBITDA per annum, driven by improved procurement, cross-selling opportunities, optimization and efficiencies.
The new company will target an investment grade credit rating profile and have a competitive dividend policy, with a minimum total floor dividend of USD 2.2 billion, based on the expected share structure at closing. Once fully operational, Borouge 4 is envisaged to be recontributed by the end of 2026 to Borouge Group International from OMV and ADNOC at cost, estimated at USD 7.5 billion.
The merger is expected to close in the first quarter of 2026.
XI. Financial Performance & Competitive Positioning
2024 Results
Group Sales reached 34 billion euros, and our clean CCS Operating Result was 5.1 billion euros. All three business segments contributed positively, with our Chemicals segment improving substantially over the previous year.
Sales Revenues EUR 34.0 bn (2023: EUR 39.5 bn). Clean CCS Operating Result EUR 5.1 bn (2023: EUR 6.0 bn). Cashflow From Operating Activities EUR 5.5 bn (2023: EUR 5.7 bn). Free Cash Flow EUR 2.3 bn (2023: EUR 2.7 bn).
I am proud that team OMV generated strong results despite a volatile market environment. We achieved the fourth-best financial result in our Company's history in 2024, demonstrating the strength of our integrated business model.
This year, we are proposing a regular dividend of 3.05 euros per share and an additional dividend of 1.70 euros per share, resulting in a total dividend of 4.75 euros per share.
Ownership Structure
As of the second quarter of 2025, OMV Aktiengesellschaft's shares are held by the Austrian state-owned Ă–BAG with 31.5%, the Abu Dhabi National Oil Company (ADNOC) with 24.9%, treasury shares at 0.2%, and a free float comprising the remaining 43.4%. The free float includes institutional investors (predominantly European and North American funds), retail investors, and unidentified holdings, providing diversified ownership that tempers the influence of the two anchor shareholders.
XII. Bull Case vs. Bear Case: A Framework for Investors
The Bull Case
Strategic Positioning in European Energy Transition: OMV has assembled a unique portfolio for Europe's decarbonization journey. Neptun Deep provides secure, EU-source natural gas at precisely the moment Europe is desperate to replace Russian supply. The chemicals business offers exposure to circular economy megatrends. The integrated model provides hedging benefits across the value chain.
Borouge Group International Creates Scale: The merger with ADNOC's chemicals assets creates the world's fourth-largest polyolefins player. The USD 500 million annual synergies, combined with access to low-cost Middle Eastern feedstock, should generate sustained competitive advantage.
Neptun Deep Upside Not Fully Priced: At 100 bcm of recoverable reserves and 8 bcm annual production plateau, Neptun Deep could transform OMV's gas business. First production in 2027 will demonstrate whether the project delivers on its promise.
Strong Dividend History: OMV has maintained attractive shareholder returns even through volatile energy markets. The proposed EUR 4.75 total dividend for 2024 represents a compelling yield.
The Bear Case
Energy Transition Execution Risk: OMV is betting that it can transform from an oil and gas company to a sustainable chemicals leader. Many companies have attempted similar pivots and failed. The capital intensity is high, and returns on circular economy investments remain unproven at scale.
Geopolitical Overhang: Austria's neutrality-enabled closeness to Russia has strained relationships with some Western partners. The reputational damage from the Gazprom relationship may linger even as OMV diversifies.
Chemicals Cyclicality: The Borealis/Borouge Group International strategy increases OMV's exposure to chemicals cycles. The industry is currently emerging from a downcycle, but petrochemicals remain inherently volatile.
Romanian Political Risk: OMV Petrom's Romanian operations, including Neptun Deep, face ongoing regulatory uncertainty. Romania's history of changing fiscal terms for extractive industries creates long-term risk.
Porter's Five Forces Analysis
Threat of New Entrants: Low. Energy infrastructure requires massive capital investment and decades to build. OMV's integrated position across refining, chemicals, and upstream creates natural barriers.
Bargaining Power of Suppliers: Moderate. OMV has reduced dependency on Russian gas but remains exposed to feedstock price volatility. Integration with Borouge Group International improves feedstock security.
Bargaining Power of Buyers: Moderate. Commodity products face price competition, but specialty polyolefins and circular economy solutions command premium pricing.
Threat of Substitutes: Elevated. Electrification threatens fuels business. Bio-based and recycled plastics create substitution pressure on virgin polyolefins. However, OMV's circular economy investments position it to participate in substitution rather than be disrupted by it.
Industry Rivalry: High. European refining faces chronic overcapacity. Chemicals competition intensifies as Middle Eastern and Asian players expand.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: Present in refining (Schwechat's integration with petrochemicals) and chemicals (Borouge Group International's global scale).
Network Effects: Limited in energy/chemicals.
Counter-Positioning: OMV's circular economy strategy represents genuine counter-positioning. Traditional oil majors struggle to pivot to chemical recycling due to cannibalization concerns.
Switching Costs: Moderate in specialty chemicals; low in commodity fuels.
Branding: Limited consumer-facing brand power. B2B reputation matters in specialty chemicals.
Cornered Resource: Neptun Deep represents a cornered resource—Romania's largest offshore gas field operated by a company with decades of local experience.
Process Power: ReOil technology offers potential process power advantage in chemical recycling, though commercialization at scale remains unproven.
XIII. Key Performance Indicators to Monitor
For long-term investors tracking OMV, three metrics deserve particular attention:
1. Clean CCS Operating Result by Segment: This reveals the underlying profitability of each business pillar (Chemicals & Materials, Fuels & Feedstock, Energy) absent inventory valuation effects. Watch particularly for Chemicals segment margins as Borouge Group International synergies materialize.
2. Sustainable Product Sales Volume: As OMV targets 1.5 million tons of sustainable fuels and chemical feedstock by 2030, tracking quarterly progress indicates execution on the core transformation thesis.
3. Neptun Deep Project Milestones: With EUR 4 billion of capital at stake and first gas targeted for 2027, project execution (on-time, on-budget) directly impacts OMV's energy segment value and Romania's status as Europe's largest gas producer.
XIV. Regulatory and Legal Considerations
Investors should note several regulatory and legal matters:
Russian Asset Claims: OMV has written down its Russian investments to zero but reserves rights to pursue claims. The December 2023 Putin decree formally transferred assets to Russian companies, but legal remedies may exist in international arbitration.
Romanian Fiscal Framework: OMV Petrom operates under various fiscal regimes including royalties and solidarity contributions. Regulatory changes remain a persistent risk factor for Romanian operations.
EU Carbon Pricing: As a major refiner and chemicals producer, OMV faces significant exposure to EU ETS carbon pricing. Higher carbon prices create both costs (for emissions) and opportunities (for low-carbon alternatives).
Borouge Group International Regulatory Approvals: The merger requires multiple regulatory clearances across jurisdictions. Completion expected Q1 2026 assumes timely approvals.
XV. The Road Ahead
Standing on the banks of the Danube in Vienna, one can almost imagine the Soviet officials who once ran Austria's oil fields, the diplomats who negotiated the 1955 State Treaty, the executives who signed the first gas contracts with Moscow. OMV's headquarters sit at the intersection of so much history.
But the past, as OMV's current leadership would say, is prologue. The company's founding as a Soviet handover shaped its first sixty years. Its next sixty will be shaped by choices being made right now: the commitment to net-zero by 2050, the bet on circular economy solutions, the partnership with ADNOC to create a global chemicals champion.
Alfred Stern, Chairman of the Executive Board and CEO of OMV AG: "Drawing upon the strength of our integrated business model, the OMV Group has demonstrated the ability to deliver on our strategic goals in these extraordinary times. We are advancing the biggest transformation in the company's history with a continued focus on our financial strength, while enabling more sustainable living in the national and international markets we operate in."
Whether OMV succeeds in this transformation will depend on execution—delivering Neptun Deep on schedule, commercializing ReOil technology at scale, integrating Borouge Group International effectively, and navigating Europe's complex energy transition.
The company that began as Soviet mineral assets transferred to a neutral state has evolved through privatization, European expansion, controversial Russian partnerships, and now a fundamental pivot toward sustainable chemicals. It's a remarkable journey—and one whose most consequential chapters may still lie ahead.
For long-term fundamental investors, OMV represents a complex but potentially rewarding proposition: a company with strong cash generation today, transformational growth projects underway, and a strategic vision aligned with Europe's decarbonization imperative. The Russian entanglement is finally ending; the circular economy opportunity is just beginning.
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