Risk Management
Like the oil, natural gas, and chemical industry as a whole, OMV is exposed to a variety of risks – including market and financial risks, operational risks, and strategic risks. The Group’s risk management processes focus on identification, assessment, and evaluation of such risks and their impact on the Group’s financial stability and profitability. The objective of these activities is to actively manage risks in the context of the Group’s risk appetite and defined risk tolerance levels in order to achieve OMV’s long-term strategic goals.
It is OMV’s view that the Group’s overall risk is significantly lower than the sum of the individual risks due to its integrated nature and the fact that various risks partially offset each other. The balancing effects of industry risks, however, can often lag or weaken. OMV’s risk management activities therefore focus on the net risk exposure of the Group’s existing and future portfolio. The interdependencies and correlations between different risks are also reflected in the Company’s consolidated risk profile. Risk management and insurance activities are centrally coordinated at the corporate level by the Treasury and Risk Management department. This department ensures that well-defined and consistent risk management processes, tools, and techniques are applied across the entire organization. Risk ownership is assigned to the managers who are best suited to oversee and manage the respective risk.
The overall objective of the risk policy is to safeguard the cash flows required by the Group and to maintain a strong investment-grade credit rating in line with the Group’s risk appetite.
OMV is closely monitoring the development of the consequences of the COVID-19 pandemic and regularly evaluating the impact on the Group’s cash flow and liquidity position.
OMV monitors the increasing geopolitical tensions and deepening crisis between Russia and Ukraine on a continuous basis and regularly reviews the potential impact on our business activities and assets. In particular, OMV assessed and continues to assess the risks related to international sanctions on Nord Stream 2 AG and the impact on repayment of the loan provided to Nord Stream 2 AG by OMV. From today’s point of view no direct impact on OMV’s Russian equity gas production is expected. However, OMV continues to monitor potential restrictions to related dividend flows. The credit risk portfolio associated with counterparties and banks located in Russia and/or potentially targeted by international sanctions (or restrictions on international money transfers) is under close review. International trade restrictions and sanctions could also lead to a further devaluation of the Russian Ruble against the Euro and the US Dollar. Disruptions in Russian commodity flows to Europe could result in further increases in European energy prices and accelerate the risk of cost inflation. From today’s point of view, OMV does not expect natural gas exports from Russia to stop. In the event of short-term gas supply disruptions from Russia, OMV can use the remaining gas in storage to supply customers and has access to other liquid gas market hubs in Europe. In such an event, an emergency team will be set up based on pre-defined internal processes. This emergency team will continuously analyze and evaluate the situation so that appropriate measures can be taken if necessary. It is also responsible to communicate and coordinate all activities with the Austrian regulator e-control. Please refer to Note 37 “Subsequent Events” of the Financial Statements for the most recent developments of the Russia-Ukraine crisis and the expected impact on OMV Group’s financials.
For further details on risk management and the use of financial instruments, please refer to Note 28 of the Consolidated Financial Statements.
For further details on climate-change-related risks and their management, see the OMV Sustainability Report as well as Note 2 of the Consolidated Financial Statements.
For further details on health, safety, security, and environmental risks, please refer to the chapter Health, Safety, Security, and Environment in the Directors’ Report.