Only a few minutes’ stroll from a metro station within the northeast nook of Vienna, you would possibly suppose that you just had been in Texas: A drilling rig greater than 130 ft excessive looms over open land.
As an alternative of oil, although, the wells will pump near 1.7 million gallons a day of sizzling water from deep underground. The water’s warmth shall be used initially to heat 20,000 households within the Austrian capital. It’ll then be pumped again under the floor.
This geothermal vitality will scale back town’s consumption of pure fuel — an necessary consideration in Europe, and never simply because it would reduce carbon dioxide emissions. OMV, the Vienna-based firm supervising the venture, is making an attempt to interrupt a longstanding dependency on Russia for fuel by pushing to safe new vitality sources.
“For us it’s a brand new chapter,” stated OMV’s chief government, Alfred Stern. For the primary time in six a long time, “we not have Russian fuel in our portfolio.”
“The dependency from Austria on Russia fuel was extraordinarily excessive,” at occasions touching 90 %, stated Anne-Sophie Corbeau, international analysis scholar at Columbia College’s Middle on International Vitality Coverage.
The efforts to decouple from Russian fuel and fortify Austria’s vitality provide come as American and Russian officers met this week to attempt to finish the conflict in Ukraine. Through the talks, Kirill Dmitriev, who heads Russia’s sovereign wealth fund, stated Russia was looking for to rebuild business ties with Western corporations, together with oil producers.
Austria was among the many first European nations to start importing Russian fuel in 1968. In depth enterprise and private ties have grown between Russia and Austria within the years since. Generations of European and Russian executives “informed themselves the story about how dependable and good this all is and the way mutually useful,” stated Georg Zachmann, a senior fellow at Bruegel, a Brussels-based analysis establishment.
Till just lately, OMV, whose predecessor was managed by the Soviets after World Conflict II, argued that it had no alternative however to honor a big fuel import contract that it made in 2006 with Gazprom, the Russian fuel monopoly.
However in December, Mr. Stern terminated the settlement, which was to run till 2040. In a press release, OMV cited Gazprom for “a number of breaches of contractual obligations.”
OMV additionally stated in November that it had gained a 230-million-euro (about $242 million) arbitration judgment in opposition to Gazprom, which it’s making use of to previous invoices for fuel.
“That is sort of a turning level the place we’re headed for brand spanking new horizons,” Mr. Stern stated.
Austria as an entire seems to have largely stopped buying Russian gas. The pipeline that fed Austria by way of Ukraine and Slovakia stopped flowing in the beginning of this 12 months.
OMV says it has ready for this second for greater than two years. It’s helped by being a large firm with 24,000 staff and a big fuel gross sales and buying and selling enterprise that accounts for a couple of third of the Austrian business market. For 2024, OMV reported adjusted earnings of €5.1 million (about $5.3 million) on €34 billion (roughly $36 billion) in gross sales.
Whereas conflict raged in Ukraine, OMV’s fuel managers have been shifting provide strains, primarily by way of Germany. Mr. Stern stated OMV was now bringing fuel piped from Norway, the place OMV has manufacturing amenities.
The corporate additionally has secured capability for liquefied pure fuel shipments at a big pure fuel terminal in Rotterdam, the Netherlands, referred to as the Gate, and it has signed multiyear contracts with BP and Cheniere Vitality, a big American supplier.
Lining up these alternate options to Russian fuel has been expensive, OMV says, regardless that the Austrian authorities, which owns 31 % of OMV, contributed a portion of the expense. The Abu Dhabi Nationwide Oil Firm additionally owns 25 % of OMV.
The modified vitality image in Europe has made the petroleum manufacturing abilities embedded in an organization like OMV extra helpful. Austria has a long-established oil and fuel business, principally run by OMV. Some 1,000 wells vary over about 1,500 sq. miles of principally flat land a simple drive from Vienna.
Alongside the roads on this area, blue and inexperienced pump jacks nod like mechanical livestock within the fields. Within the rural city of Gänserndorf, an Innovation and Know-how Middle with a trendy black exhibit tower homes specialists in specialties like drilling a properly laterally or squeezing extra oil from wells utilizing polymers.
Close to a city referred to as Wittau, OMV is making ready to develop what it says is the biggest fuel discover in Austria in 40 years. Henrik Mosser, OMV’s common supervisor for Austria exploration and manufacturing, stated the invention might improve OMV’s modest fuel manufacturing in Austria about 50 % — or extra if close by exploration panned out.
OMV specialists are additionally taking their understanding of geology to the geothermal experiment close to Vienna, the place the rig is boring a gap almost two miles deep into porous rock, steeped in sizzling water that piled up in an historical riverbed 16 million years in the past, stated Niki Knezevic, a geologist.
Though the venture pumps sizzling water for heating operations run by the utility Wien Energie, the required experience is analogous to what’s wanted for extracting petroleum.
“Drilling is drilling,” stated Bernhard Novotny, the venture director.
The most important payoff might are available in Romania, the place OMV Petrom, a subsidiary, is making ready to develop a significant fuel discovery within the Black Sea referred to as Neptun Deep. If successful, it should cement Romania’s position as the biggest fuel producer within the European Union and allow exports to Europe’s “fuel hungry” industrial heartland, together with Austria, stated Ross McGavin, an analyst at Wooden Mackenzie, a consulting agency.
Romania could be the future, however what’s conserving Austria from freezing this winter are the nation’s huge shares of saved fuel. OMV maintains a big portion of those reserves — a couple of quarter of Austria’s annual consumption — pumped underground into porous rocks. Total, Austria can retailer greater than a 12 months’s price of fuel.
In an interview within the management middle of certainly one of these amenities close to Schönkirchen, Werner Schildknecht, a division supervisor for OMV, stated that on chilly days its compressors gear as much as “present fuel to Vienna within the mornings.” On heat days, the flows reverse, including to shares.
This winter has been colder than the earlier two, jacking up stress on the fuel markets. Like a lot of Europe, Austria has responded by burning up saved fuel. In January, storage was Austria’s fundamental supply of fuel, stated Natasha Fielding, head of European fuel pricing at Argus Media, a analysis agency.
Europe and Austria are paying a stiff worth for the curtailment of Russian fuel. Though European costs might not have reached the astronomical ranges of 2022, they just lately hit two-year highs. Austria pays much more, reflecting the price of bringing fuel throughout borders, primarily by way of Germany.
Mr. Stern, the OMV chief, stated the chilly climate was good for the Austrian financial system, referring to higher circumstances for snowboarding, a high draw for vacationers. He added that the surge in costs in 2022 had been powerful on clients and possibly had led to “everlasting discount” in demand for fuel.
Mr. Stern stated the way in which to decrease costs was for Europe to amass extra sources of vitality each at residence and overseas.
President Trump’s efforts to settle the Ukraine battle provide one other potential path to added provides. The vitality business is starting to debate the potential for a resumption of Russian fuel flows to Europe if a cease-fire is reached.
Even modest quantities of Russian fuel would “take vital stress out of the European fuel market,” Henning Gloystein, an vitality analyst at Eurasia Group, a political threat agency, wrote in a publication.
Mr. Stern sounded skeptical about resuming enterprise with Russia. “There isn’t a legislation in opposition to Russia fuel,” he stated, however “the unreliability of provide by way of Gazprom was not acceptable.”
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