OMV reduces investment targets and cuts back on spending for renewables until 2030

Austria's OMV announced on Monday that it would cut sustainable investments, and reduce its target for organic capital expenditures yearly by 1 billion euro ($1.2 billion). This was also to reflect Borealis' deconsolidation following a merger.

The group has set a new organic capital spending goal of 2.8 billion euro per year. This is down from its previous projections of 3.8 billion euro. The oil, gas and chemicals group has set its new organic capital expenditures goal at 2.8 billion euros per year, down from the previously projected 3.8 billion euros.

OMV said it plans to reduce its investments in fuels, energy and related businesses by 1,5 billion euros over the next four years, in order to balance risk and opportunity. It added that around 30% of the organic investments remaining will be allocated towards sustainable projects compared to a target of 40-50%.

RBC analysts wrote in a report that "the decision to pace investment in low-carbon is also right in our opinion given the continuing challenges and uncertainties in the space."

OMV will reduce its capital expenditures until 2030 by 3.5 billion euro when it separates Borealis from Borouge following the merger. OMV and Abu Dhabi National Oil Company announced the merger of polyolefin businesses in March. The result will be a $60 billion chemicals giant. The merger should be completed by the first quarter 2026.

OMV said that it also expected to achieve a total oil and natural gas production of 400,000 equivalent barrels per day by 2030. In 2024 its hydrocarbon production per day was 340,000 barrels equivalent to oil.

By 2030, it is anticipated that cash flow from operations will exceed 6 billion euro. It was previously expecting it to reach a minimum of 7.5 billion.

(source: Reuters)