Austria Energy Minister Warns OMV Its Time in Oil Is Running Out
(Bloomberg) -- Austria’s top energy official told OMV AG it must start figuring out how to do business without fossil fuels now or risk losing its business in three decades.
Transport and Energy Minister Leonore Gewessler delivered the unusually blunt message in an interview on Thursday, just days after OMV announced the departure of boss Rainer Seele and three weeks after Austria demanded Seele clarify allegations that OMV had spied on environmental activists.
Central Europe’s biggest oil and gas company is not alone in feeling the pressure as governments, customers and investors call on the industry to step up efforts to fight climate change. The European Union’s largest oil producers are all diversifying into cleaner energy as the bloc aims for zero net emissions by 2050, but face frequent questions over whether they’re doing enough.
“The company is well aware that climate neutrality 2050 in Europe means you will not be able to earn money with fossil gas or oil,” Gewessler said. OMV should use “recent developments” at the company to “make a new start, to begin this transformation of a de-carbonization pathway. That’s the call of the day.”
OMV didn’t immediately respond to a request for comment.
The state-controlled producer is shifting its focus toward petrochemicals, though continues to invest in finding new gas and oil deposits worldwide. Capital spending on exploration and production will rise slightly this year to $279 million, the company said earlier on Thursday. It expects output to increase by about 4% in 2021 to 480,000 barrels of oil equivalent a day.
Gewessler publicly questioned OMV’s Seele on Twitter earlier this month after it emerged that the company had used contractors to surveil Greta Thunberg’s Fridays for Future Movement and Greenpeace. Four days later, Seele announced that he wouldn’t prolong his term beyond June 2022.
While Austria’s state-assets agency and Finance Ministry are formally responsible for supervising OMV, Gewessler’s words carry weight as the official in charge of energy policy.
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On Thursday, Seele said during a press conference that he was leaving to spend more time with his family and that he recognizes the mounting difficulties that oil executives face in managing pollution costs.
“If you believe that carbon dioxide prices will go down, you’re naive,” Seele said. “It will continue to rise under all scenarios.”
OMV’s shares rallied on Thursday after the company told analysts it could potentially save more costs than advertised by integrating its Borealis subsidiary into broader operations. Profit margins for key industrial chemicals widened in the last quarter.
“One part of this story will be the petrochemical side of things,” Gewessler said. “You need to develop a strategy that actually enables you to have a business model still in 2050.”
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