NEW YORK, June 7 (Reuters) - Austrian oil and gas company OMV (OMVV.VI) is not planning on selling its majority stake in the petrochemicals subsidiary Borealis, OMV Chief Executive Alfred Stern said on Wednesday.
The state-run Abu Dhabi National Oil Company (ADNOC) owns 25% of OMV and also has a stake in Borealis. Both companies are focused on growth through chemicals and plastics.
ADNOC last year announced a plan to spend $150 billion over 2023-2027 on a growth strategy that included a new division focused on energy including chemicals. That triggered speculation ADNOC may buy OMV's controlling stake in Borealis.
"We are not going to sell the Borealis stake," Stern told Reuters on the sidelines of an energy conference in New York.
Europe should be in a better position for natural gas supplies ahead of this winter than last year, Stern said.
Russia's invasion of Ukraine and subsequent sanctions imposed by the European Union triggered an energy crisis in Europe as oil, gas and power prices soared. Europe relied on Russian gas and oil for much of its energy.
The EU scrambled to compensate for lower Russian gas supplies, and was spared a worse crisis by the relatively mild winter.
The European gas market is less tight than last year due to a combination of lower industrial demand, lower prices on the international gas market, and measures across Europe to reduce reliance on Russia, Stern said.
Germany's heavy industry, which relied on cheap Russian gas, has shut some capacity permanently, and energy conservation measures across the continent have also reduced demand.
OMV would be able to fulfill its gas supply contracts in Austria even if Russia's Gazprom (GAZP.MM) halted supplies, Stern said. OMV receives gas from Gazprom through a pipeline that transits Ukraine.
OMV has its own output in Norway and has purchase agreements with other suppliers to ensure it could compensate for a loss of Russian supplies.
The company has booked pipeline capacity to deliver that gas to Europe if needed, Stern said.
Fuel markets in Europe have stabilized, even after Europe banned imports of Russian fuel in February. The energy industry has coped well with the disruptions triggered by the war, he said.
"There has been a massive rearrangement of supply chains," Stern said.
Refinery profit margins have come down since the start of the year and normalized, the CEO added.
OMV has projected refining margins to average between $10 and $15 per barrel, but they may fall below that level, he said.
"For the year (it) will be more toward the lower end, but we are looking if we are going to fall out the bottom end of this potentially," Stern cautioned.
OMV sees Brent oil averaging above $80 per barrel for 2023, he added. Brent prices are currently around $77 per barrel.
Reporting by Stephanie Kelly and Simon Webb Editing by Bill Berkrot
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