The Russian government has extended for another year the price regulation on products sold by Gazprom (MCX:GAZP)'s joint ventures with Germany's Wintershall Dea and Austria's OMV, according to amendments to President Vladimir Putin's decree No. 943 announced on Monday. The decree "On applying special economic measures in the area of supplying natural gas in connection with the unfriendly actions of several foreign states and international organizations" was initially adopted on December 22, 2022, and was set to expire on October 1, 2023.
The regulation, which applies retroactively from March 1, 2022, pertains to gas and condensate from the Achimov deposits of the Urengoy oil and gas condensate field, gas from the Yuzhno-Russkoye field, as well as gas and condensate production services at the Urengoy Achimov deposit. The Russian government must establish within 10 days the upper limit for prices and rates in these three areas. However, the decree clearly states that this regulation does not apply to transactions completed at organized auctions.
By this decree, the Russian government sets the prices above which Gazprom will not purchase gas and services from its joint ventures with Wintershall Dea and OMV. The decree is now valid until October 1, 2024.
Wintershall Dea owns a 25.01% stake in the Achim Development joint project with Gazprom (74.99%) for the development of Achim deposits of the Uregngoyskoye field. Alongside Gazprom and OMV, it also manages the Severneftegazprom joint venture developing the Yuzhno-Russkoye field. However, Wintershall Dea is currently exiting its assets in Russia and plans to complete this process by mid-2024.
Austria's OMV has previously announced that it will not invest in Russian projects and intends to review its 24.99% stake in the Yuzhno-Russkoye field. It is also reconsidering its participation in the construction of the Nord Stream 2 gas pipeline. OMV terminated an agreement with Gazprom dated October 3, 2018, which would have led to OMV receiving a 24.98% stake in the project to develop sections 4A and 5A of the Achimov deposits of the Urengoysloye field.
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