Largest natural gas discovery in Austria for 40 years uncovered by OMV - Upstream Online
Largest natural gas discovery in Austria for 40 years uncovered by OMV | Upstream Online
Austria’s OMV has confirmed its largest domestic gas discovery this century on the same day it signed a long-term LNG supply deal with supermajor BP.
OMV said that deep exploration well Wittau Tief-2a is now a confirmed new natural gas discovery, the biggest of its kind for the company in 40 years.
Alfred Stern, OMV chief executive, said: “As we continue to work on our strategy to diversify our supply sources of natural gas, this new find marks a major contribution to the natural gas supply of our customers especially in Austria, with an expected increase of our local production.”
The OMV operated well is located in Lower Austria and was drilled to a final depth of 5000 metres after five months of operations.
Preliminary evaluation indicates potential recoverable resources of approximately 48 terawatt hour or 28 million barrels of oil equivalent.
After full development of the discovery, OMV expects its natural gas production in Austria to increase by 50%.
OMV is currently considering options to further appraise the field and also to fast-track development in conjunction with its operated gas facility in Aderklaa about 10 kilometres from the discovery, the company said.
Speaking at a conference call on Friday, Stern said that the development is seen as "economically feasible" even in the current low gas price environment in Europe.
The company in its latest financial report said that for the full year 2023, it expects its oil and gas production to decline by more than 8% to 360,000 barrels of oil equivalent per day due to the exclusion of volumes produced by its joint venture with Gazprom in Russia, and natural decline in Norway and Romania.
This year, OMV is planning to invest between €200 million (US$219.2 million) and €250 million into exploration and appraisal efforts against €202 million last year.
Tax rate pain
According to its second quarter 2023 financial report, the company's consolidated sales revenues decreased 39% to about €9 billion against the same period of 2022, mainly due to lower commodity prices. Against the first quarter of this year, second quarter sales revenues fell by 18%.
The overall group’s tax rate increased to 61% in the second quarter 2023 versus 31% one year prior as a result of the solidarity contribution on refined crude oil in Romania and an increased tax rate on energy companies, OMV said.
Net income decreased significantly to €326 million compared with €2.5 billion in the second quarter of 2022 and net income attributable to stockholders of the parent was down to €380 million against €2 billion last year.
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.