Austria's OMV Sues Turkey for Pulling Out of Nabucco Pipeline Project

Austria's OMV, the largest oil and gas company in Eastern and Central Europe, is suing Turkey and its prime minister, Ahmet Davutoglu, for pulling out of the Nabucco gas pipeline project, the Austrian business weekly Trend reported.

OMV is seeking damages for Turkey's decision to back out of the project, which was supported by the European Union and would have built a pipeline to carry natural gas from Azerbaijan to Europe, reducing dependence on Russian gas.

Ankara withdrew from the project and agreed in May to a deal with Russia for an alternative gas pipeline, the TurkStream.

OMV, which filed suit with a World Bank international arbitration panel in June, refused to comment, Trend said.

The Austrian energy company liquidated OMV Nabucco Gas Pipeline International GmbH, a unit created to build Nabucco, at a loss of 177 million euros ($197.9 million), the business weekly said.

OMV said during the release of its quarterly results that it was developing a strategy for expanding cooperation with Russia to shore up revenues amid the collapse of oil prices on the global market and production cuts in Libya and Yemen, two countries where it operates.

The Austrian energy company's revenues plunged 38 percent in the second quarter, compared to the same period in 2014, despite higher production.

OMV signed a memorandum of understanding with Russia's Gazprom, as well as with Anglo-Dutch supermajor Royal Dutch Shell and Germany's E.ON, to double the capacity of the Nord Stream gas pipeline, which links Russia and Germany via the Baltic Sea.