Failed Nabucco pipeline project costs Austria's OMV €55m writedown

24 July 2013 16:22  [Source: ICIS news]

LONDON (ICIS)--OMV is to book a €55m ($72m) one-off charge on the writedown of assets involved in the failed Nabucco West pipeline project to deliver Azeri gas to Europe, the Austrian oil, gas and petrochemicals group said on Wednesday.

In late June, the Nabucco Gas Pipeline International consortium, in which OMV was the lead shareholder, failed to win the export rights on gas that is to flow from Azerbaijan's offshore Shah Deniz II field.

The Nabucco West bid, a decade in the planning, lost out to the rival Switzerland-based Trans Adriatic Pipeline (TAP) project offer.

OMV said it would book the writedown as a net special charge in the second-quarter results it is scheduled to release on 13 August.

Investment bank WOOD & Company has concluded that despite the required writedown, the failure of the Nabucco project may turn out to be a positive outcome for OMV.

Nabucco did not fit OMV's reformulated group strategy and its demise meant the company would be able to invest some €1bn less in the next four-to-five years in a non-core, low-return business, the bank said.

The other Nabucco consortium shareholders are FGSZ, a subsidiary of Hungary's MOL oil, gas and petrochemicals group, Bulgaria's Energy Holding, Romania's Transgaz and Turkey's Botas.

($1 = €0.76)

By: Will Conroy
+44 20 8652 3214

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