By Ty Malcolm
When you ask people for the business capital of the world, several answers are very popular: New York, London, maybe Tokyo... Vienna is not usually on the list. But there are several large multinational corporations that (despite less-than-ideal tax conditions) call Austria home. One of the largest is an international oil and gas company named OMV. In one way or another, OMV sponsors almost everything in Vienna - even the famous Vienna Philharmonic. (Thanks to OMV, opera-enthusiasts can stream performances live.) OMV also has several literature collections, lecture halls, and workrooms on our campus. One of my courses, International Energy Strategies, is taught by a professor working in the financial office of OMV. Because of this tight connection with Vienna and the University of Economics, I thought it was worth giving an overview of the company, and the course they offer on campus.
OMV, a German abbreviation for "Austrian mineral oil management company," was originally a state-owned energy company that was partially privatized in 1987. After the turn of the 21st century, OMV has acquired several assets in Germany, Hungary, and Romania, making it a leader in Central and Eastern Europe. OMV has a big presence in Vienna, with an organic-shaped HQ building near the campus of the University of Economics and a huge refinery in Schwechat, near Vienna's airport.
This refinery also serves as a transport hub, allowing Russian and Romanian natural gas to be transported to important markets in Switzerland, Italy, and North Africa.
Upstream Activities
Compared to other multinational oil energy companies, OMV can seem at times to be more risk-averse. Investments in exploration, which carry more risk, are usually made in stabile countries, with 90% of OMV production in 2016 coming from EU/OECD countries. The production split between oil and natural gas is almost 50-50, which provides more protection from price swings in either market.
Downstream Activities
Besides the Schwechat refinery, OMV also owns a gas distribution node in Baumgarten, Germany, which is Central Europe’s largest entry point for gas from Russia. In this way, this Austrian firm has positioned itself at two vital entry points for natural gas shipments from the East. It also has a presence in the Netherlands, where there is infrastructure available to export liquid natural gas (LNG). In countries with a higher risk profile like Romania and Turkey, OMV operates power-plants that can respond more quickly to economic or political changes than a drilling or mining operation.
At GW, I had taken Prof. Weiner's Oil: Industry, Society, Economy course, which gave a good outlook on the oil industry, historical and contemporary case studies, and trends for the future. My course here in Vienna is the perfect follow-on course. It examines specific financial and accounting statistics that make or break investment decisions for international energy companies. If you don't understand the numbers, you're sure to get stuck with a bad deal! With every investment example, the professor will say something like "...and here is where they are trying to trick you!" Because he works in this field, he brings his real-world experience straight to the classroom.
If you have any interest in energy (renewables vs fossil fuels, production vs distribution, doesn't matter), I highly recommend this course at the Vienna University of Business and Economics.