25 – Provisions

Pensions and similar obligations include mainly provisions for pensions, severances, and jubilee bonuses. More information on material IAS 19 employee benefits is included in the Provisions for pensions and similar obligations section.

Decommissioning and restoration details are included in the section Provisions for decommissioning and restoration obligations.

Other provisions mainly include provisions for onerous contracts, provisions for emissions certificates, and other personnel provisions. More information is provided in the Other provisions section.

Provisions for pensions and similar obligations accounted for according to IAS 19

The following tables include details on funded and unfunded pension plans (mainly Austria, Germany, Sweden, and Belgium), severance plans (mainly in Austria), and medical plans (in Belgium).

The majority of the pension commitments of several OMV companies have been transferred to country-specific external pension funds. Pension commitments were calculated based on country- and plan-specific assumptions. Refer to Note 3 – Accounting policies, judgments, and estimates for more details.

The majority of pension commitments are attributable to plans in Austria and Belgium and were transferred to external pension funds managed by APK Pensionskasse AG in Austria and Vivium, Towers Watson LifeSight and KBC Asset Management in Belgium. The investment of plan assets in Austria is governed by section 25 of the Austrian Pension Fund Act and the Investment Fund Act. In addition to these regulations, the investment guidelines of APK-Pensionskasse AG regulate the spread of asset allocation, the use of umbrella funds, and the selection of fund managers. The investment plans in Belgium follow the investment strategy of the respective insurance company as well as local legal regulations.

The allocation of plan assets was mainly in debt securities and insurance contracts. Aside from the insurance contracts, which are not quoted, the majority of plan assets are invested in liquid active markets for which quoted prices are available.

Expected contributions to post-employment benefit plans for the year 2024 total EUR 26 mn. Moreover, defined benefit contributions related to 2023 in the amount of EUR 24 mn are expected to be paid in 2024.

The following actuarial assumptions for calculating pension expenses and expected defined benefit entitlements are considered as material and are stress tested within the following ranges. The increase or decrease compared to the values accounted for defined benefit obligations in relative deviation terms and in absolute values are as follows:

Provisions for decommissioning and restoration obligations

The production facilities and properties of all Group companies are subject to a variety of environmental protection laws and regulations in the countries where they operate. The estimated cost of known environmental obligations has been provided in accordance with the Group’s accounting policies. Provisions for decommissioning and restoration are recognized if an obligation exists at the statement of financial position date.

Management believes that compliance with current laws and regulations and future more stringent laws and regulations will not have a material negative impact on the Group’s results, financial position, or cash flows in the near future.

The increase arising from revisions in estimates was mainly driven by decreased real interest rates for RON and EUR compared to 2022. Additional impacts stemmed from higher cost estimates, especially in Romania.

The decommissioning provisions related to the SapuraOMV disposal group were reclassified to liabilities associated with assets held for sale. For details see Note 22 – Assets and liabilities held for sale.

A decrease of 1 percentage point in the real discount rates used to calculate the decommissioning provisions would lead to an additional provision of EUR 602 mn; in the opposite case the provision would decrease by EUR 504 mn. For the estimation of maturities and cash outflows of decommissioning and restoration obligations refer to Note 2 – Effects of climate change and the energy transition.

The provisions for decommissioning and restoration costs included obligations attributable to OMV Petrom SA amounting to EUR 1,786 mn (2022: EUR 1,397 mn). Part of the obligations is to be recovered from the Romanian state in accordance with the privatization agreement. For further information see Note 20 – Financial assets.

Other provisions

As at December 31, 2023, the provision for environmental costs included EUR 57 mn relating to the provision for soil remediation at the Arpechim refinery site in Romania. The increase compared to 2022 was mainly related to the newly recognized provision at Borealis to cover future transport and removal costs of contaminated soil at the Kallo location (Belgium) in the amount of EUR 22 mn.

The provisions for onerous contracts were mainly related to associated transportation commitments of OMV Gas Marketing & Trading GmbH.

The provision for onerous contracts related to the Gate LNG obligation of OMV Gas Marketing & Trading GmbH was fully released in the course of 2023, due to favorable LNG market conditions (2022: EUR 32 mn).

At the end of 2023, the provision for the related non-cancellable transportation commitments of OMV Gas Marketing & Trading GmbH amounted to EUR 258 mn (2022: EUR 188 mn). The increase in provision was mainly driven by additional transport capacities that were booked in order to secure alternative supply routes for Austria, as well as changes in underlying parameters (tariffs, discount rate, etc.). The calculation is based on the difference between the fixed costs for using the capacities and the net profit from usage expected to be generated by using the capacities. The discount rate applied was 2.00% (2022: 2.53%). Besides the discount rate, the key assumptions are the gas prices at the relevant gas hubs which are based on forward rates or on management’s best estimates of future prices.

Other personnel provisions included short-term provisions related to personnel reduction schemes of EUR 14 mn (2022: EUR 13 mn). The remaining amount was mainly related to provisions for bonuses.

OMV voluntarily changed its accounting policy for the presentation of purchased emissions certificates and provisions for CO₂ emissions in the consolidated statement of financial positions. For more details on emissions certificates and the change to the accounting policy refer to Note 2 – Effects of climate change and the energy transition – and Note 3 – Accounting policies, judgments, and estimates respectively.

Residual other provisionsdecreased in 2023 mainly in connection with other risks assessed by the Group in the area of gas and power taxation in Romania.