By means of ab initio calculations we study the effect of O-doping of Au chains containing a nanocontact represented by a Ni atom as a magnetic impurity. In contrast to pure Au chains, we find that with a minimun O-doping the $5d_{xz,yz}$ states of Au are pushed up, crossing the Fermi level. We also find that for certain O configurations, the Ni atom has two holes in the degenerate $3d_{xz,yz}$ orbitals, forming a spin $S=1$ due to a large Hund interaction. The coupling between the $5d_{xz,yz}$ Au bands and the $3d_{xz,yz}$ of Ni states leads to a possible realization of a two-channel $S=1$ Kondo effect. While this kind of Kondo effect is commonly found in bulk systems, it is rarely observed in low dimensions. The estimated Kondo scale of the system lies within the present achievable experimental resolution in transport measurements. Another possible scenario for certain atomic configurations is that one of the holes resides in a $3d_{z^2}$ orbital, leading to a two-stage Kondo effect, the second one with SU(4) symmetry.
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