OMV

Description

History

1956 Founding of the OMV joint stock company

1960 Start-up of the Schwechat refinery

1985 Start of international EP-business (Libya)

1990 Inauguration of the first OMV filling station

1991 Commencement of international filling station business (Hungary)

1995 Alteration of name from ÖMV to OMV

2003 Important acquisitions: International portfolio of Preussag Energie and 45% of Bayernoil-Raffinerieverbund

2004 Greatest acquisition in the company's history: 51% of the Romanian oil and gas group Petrom SA

2005 Sale of the stake in the Rompetrol Group; OMV and IPIC acquire 100% of Borealis; OMV sells 50% AMI stake to IPIC

2006 In June 2006 the OMV Future Energy Fund was established, aiming to identify projects in the field of renewable energy within the OMV Group, provide assistance with their implementation and financially support them with funds of more the EUR 100 mn. With this fund, OMV intends to commence its transition from a pure oil and gas group into an energy group whose portfolio includes renewable energies. Funding for the first six projects in the areas of renewable energy and the reduction of greenhouse gases was granted in December 2006.

2007 In Libya, OMV made two oil discoveries in the exploration block NC200 in the Southern Sahara Desert. In Pakistan, the Group further strengthened its position.

Strategy

Outlook

OMV Aktiengesellschaft, has set new targets for the company growth until 2010. After achieving its 2008 goals ahead of schedule, the company now aims for a production volume of 500,000 boe per day by 2010 and for further expansion of its Refining and Marketing business in the EU accession area. In addition, OMV will run an international gas business marketing 20 bcm of gas by 2010.

Central Europe
OMV is the largest oil and gas group in Central Europe, with oil and gas reserves of approx. 1.4 bn boe. The Group will build upon continued growth and boost its profitability potential. This means further expansion from mature into growing markets in order to increase its lead to other regional competitors.

Exploration and Production
By 2010, OMV's Exploration and Production business will produce 500,000 boe/d in six core regions. A focus will be added on Russia in addition to the Danube and Adriatic, Northern Africa, the North Sea, the Middle East/Caspian and Australia/New Zealand as a new core region for OMV's E&P activities. OMV will target significant production growth in international business outside Austria and Romania, aiming at a reserve replacement ratio of 160%.

Gas - international gas business up and running by 2010
OMV is set to meet the challenges of a growing gas market and intends to make full use of the rising gas demand in Central and Eastern Europe. OMV will therefore build upon an international gas business and expand its gas marketing volumes to 20 bcm per year. OMV will also realize opportunities to further diversify its gas supply. OMV will focus on the realization of the Nabucco project to deliver gas to its Baumgarten hub and further to Western Europe. Moreover, OMV will develop LNG projects in order to market gas in the Adriatic sales regions. OMV intends to undertake a feasibility study for an LNG Terminal in the Adriatic region with one or more international experienced partners.

Petrom sets new targets for 2010
Petrom, South Eastern Europe's leading producer of oil and gas, also sets new targets for the company's growth to 2010. Petrom aims for a stable oil and gas production volume of 210,000 boe per day in Romania until 2010. In addition, the Caspian region should be developed into a core region, the reserve replacement ratio should rise to 70% by 2010.

The company plans to raise its refinery utilization to 95% (2004: 75%) by 2010 and will comply with EU product quality by the end of 2007. In addition, more than 250 new standard PetromV filling stations will be built by 2010. Moreover, the company will achieve more than 30% market coverage (2004: 26%). In the Gas business, Petrom will increase its gas marketing volume to over 7 bcm in Romania with a market share of more than 35%.

Middle East, North Africa and the Caspian Region

In November 2007, OMV signed a Memorandum of Understanding with International Petroleum Investment Company (IPIC), OMV's second largest shareholder, to pursue upstream projects in the Middle East, North Africa and the Caspian Region - all of which are amongst OMV's E&P core regions where the company has already established a significant presence. Both companies agreed to share their expertise and knowledge relevant to assessing future projects. IPIC and OMV believe that this is a natural step in the development of their deepening partnership and cooperation. Both companies are in a position to complement each other, IPIC with its regional relationships and OMV with its technical and geological know how.

In May 2007, OMV opened an office in Abu Dhabi to improve the screening of business opportunities and the coordination of existing activities in the region. IPIC has been OMV's shareholder since 1994 and today holds 17.6% of OMV.

Key data

As the leading oil and gas group in Central Europe, OMV is active in Refining and Marketing (R&M) in 13 countries. In Exploration and Production (E&P) OMV is active in 20 countries on five continents. In the Gas business segment OMV has storage facilities and a 2,000 km long pipeline system, transporting 47 bcm of natural gas annually to countries such as Germany and Italy. Sales volumes of gas amount to 14.11 bcm. OMV holds stakes in integrated chemical and petrochemical plants – 50% in AMI Agrolinz International GmbH and 35% stake in Borealis A/S, one of the world's leading producers of polyolefin. Other important holdings are: 51% of Petrom SA, 50% of EconGas GmbH, 45% of the BAYERNOIL refining network and 10% of the Hungarian company MOL.

With the acquisition of a majority stake in the Romanian Petrom, OMV has become the largest oil and gas group in Central Europe, with oil and gas reserves of approx. 1.2 billion boe, daily production of around 324,000 boe and an annual refining capacity of 26.4 million metric tons.

Review of 2007 Results

OMV generated the best results the Group ever had in its history in the year 2007. Group sales increased by 6% to EUR 20.04 bn, EBIT (earnings before interest and taxes) amounted to EUR 2.18 bn and increased by 6% compared to the same period 2006. The EBIT contribution of Petrom was EUR 581 mn. Net income after minorities increased by 14% to EUR 1.58 bn. Cash flow of operations rose by 2% to EUR 2.07 bn. The gearing ratio is 23.7%.

In 2007, total investments of EUR 4.12 bn, including the acquisition of MOL shares (EUR 1.32 bn were attributed to increase of OMV’s share in MOL from 10% to 20.2%) were significantly higher than those in the same period 2006 (2006: EUR 2.52 bn).

EUR 1.36 bn of these investments were directed into E&P, mostly for the development of new fields in Romania, Kazakhstan, Austria, New Zealand and the UK. EUR 1.28 bn was invested into R&M in petrochemical projects in Burghausen, quality enhancement projects in the refineries as well as increasing OMV’s share in Petrol Ofisi to 39.58% at the end of December 2007. In the gas segment EUR 155 mn was invested, mostly into the expansion of the West-Austria gas pipeline (WAG).

Comparing fourth quarters, sales in 2007 increased by 11% to approximately EUR 5.73 bn and EBIT rose by 25% to EUR 492 mn. Net income after minorities increased by 8% to EUR 318 mn. At the end of December 2007, OMV Group (incl. Petrom) had 33,665 employees.

Exploration and Production

2007 Key performance indicators (% change)
Total hydrocarbon production in mn boe: 117.2 (-1) 
Total hydrocarbon production in boe/d: 321,000 (-1) 
Crude oil and NGL production in mn bbl: 59.8 (-3) 
Natural gas production in mn boe: 57.4 (+ 1) 
Average realized crude price in USD/bbl: 66.27 (+ 14)

In 2007, this segment further strengthened its position in its core regions with the acquisitions of new licenses. Offshore exploration licenses were acquired in Norway, Great Britain, Ireland, Egypt, Australia and New Zealand. In Romania, restructuring measures have had positive results, new discoveries were made and production declines in oil could be stopped.

In Libya, OMV made two oil discoveries in the exploration block NC200 in the Southern Sahara Desert. In Pakistan, the Group further strengthened its position. In the Sawan gas field OMV managed to increase its sales volumes by more than 15% thanks to additional wells and improved facilities. The Group discovered gas in successful exploration wells in the Latif-1 exploration block near Sawan and in Tajjail-1 in the Gambat block.

In Austria EUR 120 mn will be invest in the restructuring of production facilities in the Vienna basin by 2009. OMV aims to sustainably secure the oil and gas production in this region.

OMV signed a Memorandum of Understanding with International Petroleum Investment Company (IPIC) to pursue joint upstream projects in the Middle East, North Africa and the Caspian Region. OMV acquired two exploration blocks in the Kurdistan Region of Iraq. Furthermore OMV signed an agreement with the Libyan NOC for the redevelopment of huge oil fields. The planned investments aim at substantially increasing and securing oil production in this region for the next decades.

OMV signed agreements with the Slovakian oil and gas company NAFTA a.s. regarding the joint exploration of the Slovak part of the Vienna basin.

Segment sales increased mainly due to higher sales volumes. Brent increased by 11% compared to 2006. In EUR terms, this represented an increase of just 2%. The Group’s average realized crude price was USD 66.27/bbl, an increase of 14%. The Group’s average realized gas price in EUR was up 15%, mainly reflecting the increased gas price in Romania. EBIT remained at a similar level compared to 2006. The lower contribution from Petrom, as a result of lower volumes and a negative FX impact, was compensated by higher price levels and higher production volumes mainly in New Zealand and Libya.

In 2007, special charges included the reversal of impairments from the Sinelnikovskoe field (Kazakhstan), the sale of the Cherugi field (Tunisia), the impairment of the Suilven field (UK), charges relating to personnel restructuring in Austria and Romania as well as the reversal of impairments from a Petrom fertilizer plant and provisions for litigation risk.

OPEX in USD/boe increased by 18% compared to 2006. At Petrom, OPEX were up by 23%, mainly due to FX effects and the negative impact of lower production volumes on unit costs. Exploration expenditure was up 65% on 2006 mainly driven by increased activities in Petrom (Romania and Russia), Norway, UK, Australia and New Zealand.

Total production of oil, NGL and gas fell slightly by 1% to 321,095 boepd. Oil and NGL production was 3% below 2006 due to the disposal of assets in Ecuador in Q4/06, the change of contract in Venezuela in Q2/06, and lower volumes in Romania. Gas production increased by 1%. At Petrom, gas production was negatively impacted by reduced demand due to the mild winter in Q1/07, technical difficulties and seasonally lower gas volumes due to high pipeline pressure in the summer months.

As of December 31, 2007, the proved oil and gas reserves were 1,216 mn boe (of which 894 mn boe related to Petrom). The proved and probable oil and gas reserves amounted to 2,036 mn boe (Petrom: 1,435 mn boe). With 2007 Petrom reserves are now included in the Group’s reserves for three full years. This has lead to a significant reduction of the reserves replacement rate, which is calculated as a three-year average, to 46% in 2007 (2006: 406%).

Gas

Key performance indicators (% change)
Combined gas sales volumes in bcm: 13.07 (-7) 
Average storage capacities sold in cbm/h: 771,286 (+ 15) 
Total gas transporting capacity sold in bcm: 52.00 (+ 11)

In May 2007, OMV and Gazprom signed a Memorandum of Understanding on further cooperation in the gas business. The two companies have stated their interest to work together more closely on the Central European Gas Hub (not to be mistaken with the physical Baumgarten Hub, which continues to be a 100% subsidiary of OMV) and on future gas storage projects. On January 25, 2008, Gazprom's 50% participation in the Trading Hub was finalized. The aim of this is to develop the CEGH into the most important trading gas hub in continental Europe. Both companies are seeking to strengthen security of gas supply in Europe.

Together with consortium partners OMV founded Adria LNG d.o.o. for the construction of an LNG regasification terminal on the Croatian Island Krk. The new regasification terminal will originally have an annual capacity of approximately 10 bcm. Furthermore OMV acquired a 5% interest in the planned Liquefied Natural Gas (LNG) Terminal in Rotterdam.

The EBIT of the Gas segment increased by 81%, mainly due to the full consolidation of EconGas, the outstanding performance of the logistics business but also due to better results at Petrom.

The EBIT of the marketing and trading business increased by 106% due to the consolidation of EconGas and improved results in Petrom. Against the market trend in Romania, Petrom’s sales volumes increased compared to 2006 due to the flexibility to supply short-term demand of power plants.

Total marketing and trading volumes were negatively influenced by the restructuring of the Russian supply contracts, as well as the overall weaker gas environment in Austria. The relatively warm winter period of Q1/07 was partly offset by EconGas by increased business activities on the international natural gas market leading to a strengthening of marketing and trading's position as well as constituting the basis for the following year.

The logistics business benefited from higher volumes in transportation and storage. Total gas transportation capacity sold increased due to expanded capacity at the TAG Loop II, which came into operation at the end of 2006, an extension of the WAG pipeline system as of Q4/07 and optimized marketing of the transport capacity of other pipelines. Short-term contracts starting in Q3/07 further increased the result. The result of the storage business improved significantly as high capacities were booked for 2007 following the cold winter of 2005/06. Thus the average storage volume and capacity sold were significantly above last year’s level.

E&P Outlook 2008

E&P volumes, after a slight production decrease in 2007, are expected above last year’s level. The development focus will be on New Zealand (Maari), Kazakhstan (Komsomolskoe), Yemen (Habban), Austria (Strasshof and Ebenthal) and Libya (several recent discoveries). In Romania, the well modernization program will continue, as will the efforts to further enhance production efficiency. Therefore growth in oil and gas production will mainly come from production start-ups in New Zealand and Kazakhstan in the second half of 2008 as well as increasing production performances in Yemen and Romania. One of the key initiatives in 2008 will be the integration of the recently acquired oil services business of Petromservice. Petrom is now in a position to directly control the modernization process of this business in order to increase quality and efficiency of the operations and to support the reduction of production costs. Overall industry cost inflation is expected to continue in a high oil price environment. However, actions to tighten cost control, the modernization program at Petrom and higher production quantities will help to improve OPEX in cost per unit terms.

In the Gas segment, the internationalization of the business activities will be further pursued. The focus will be on the extension of trading activities at international hubs and on growing the direct sales business. A further entry to new sales and trading markets within the European growth belt is being evaluated. This development is expected to be strengthened by the local presence of EconGas in Austria, Germany, Italy and Hungary as well as by the growth of Petrom’s gas business in Romania. To satisfy the need for security of supply in Europe and also to support our growth strategy OMV will continue to diversify their supply base with LNG projects and their international logistic projects.

In the logistics business, Austria’s significance as the major Central European gas turntable is underpinned by the extension of transit pipelines, the rapid growth of the Central European Gas Hub (CEGH) and the planned storage projects. The Nabucco project, which is one of the key European energy infrastructure projects, further increases the importance of this turntable position. This pipeline aims at securing additional natural gas supply to Europe via a connection to the Caspian region and to the Middle East. An approval of the exemption - applied for at the national regulatory authorities as well as the European Commission - at terms and conditions acceptable for the Nabucco consortium and a successful open season together with resulting first transport contracts will be the basis for the final investment decision. Furthermore, the feasibility studies for the Adria LNG project are to be completed in the course of 2008. One of the major drivers of the strong growth in gas demand in Europe are gas fired power plants.

OMV believes that additional value can be generated through the expansion of the gas value chain in the downstream business, and power projects are being pursued in Romania and in Germany to supply the company's refineries. The beginning of the construction of the power plant in Romania at Petrobrazi will be a milestone in 2008. To reflect these power activities, the Gas business segment will be renamed Gas and Power.

Capex

Future Plans

Middle East, North Africa and the Caspian Region

In November 2007, OMV signed a Memorandum of Understanding with International Petroleum Investment Company (IPIC), OMV's second largest shareholder, to pursue upstream projects in the Middle East, North Africa and the Caspian Region - all of which are amongst OMV's E&P core regions where the company has already established a significant presence. Both companies agreed to share their expertise and knowledge relevant to assessing future projects. IPIC and OMV believe that this is a natural step in the development of their deepening partnership and cooperation. Both companies are in a position to complement each other, IPIC with its regional relationships and OMV with its technical and geological know how.

In May 2007, OMV opened an office in Abu Dhabi to improve the screening of business opportunities and the coordination of existing activities in the region. IPIC has been OMV's shareholder since 1994 and today holds 17.6% of OMV.

Production

In 2007, total production of oil, NGL and gas fell slightly by 1% to 321.095 boepd.

2006 production in oil, NGL (natural gas liquids) and gas slightly declined by 4% to 118.4 mn boe (barrels of oil equivalent), which corresponds to an average daily production of 324,000 boe. Oil and NGL production of 61.6 mn bbl was 6% lower than last year's level (2005: 65.6 mn bbl). The decisive factor were lower production volumes in Romania that in the short term could not be offset by improved reserve management and exploration successes, lower volumes in the UK and the sale of assets in Qatar and Ecuador as well as an alteration of contracts in Venezuela.

Reserves

As of December 31, 2007, the proved oil and gas reserves were 1,216 mn boe (of which 894 mn boe related to Petrom). The proved and probable oil and gas reserves amounted to 2,036 mn boe (Petrom: 1,435 mn boe). With 2007 Petrom reserves are now included in the Group’s reserves for three full years. This has lead to a significant reduction of the reserves replacement rate, which is calculated as a three-year average, to 46% in 2007 (2006: 406%).

As of December 31, 2006, total proved reserves (including Petrom) were 1,300 MMboe (2005: 1,365 MMboe).

Who's Who

Head of: Refining and Marketing incl. petrochemicals.

After studying economics in Vienna, Linz and Stanford, USA, Gerhard Roiss held various managerial positions in the consumer goods industry.

In 1990 he joined OMV and headed the Group marketing. In the same year he was appointed to the Board of PCD Polymere where he became CEO in March 1997.

Since September 1997, Roiss has been the member of the OMV Board in charge of Chemicals and Plastics.

Since March 2000, when the responsibilities of the Executive Board changed, he has taken over the Exploration and Production business and also heads the Company's Plastics activities.
Since January 2002, he is Deputy Chairman of the Executive Board and responsible for Refining and Marketing incl. petrochemicals.

Since July 1, 2004: additionally Managing Director of OMV Refining & Marketing GmbH
Chairman of the Borealis Supervisory Board.

Head of Finance, OMV Solutions GmbH

Curriculum Vitae:

1975-1978: Liverpool University
1978-1981: Touche Ross & Co, Liverpool office training to become a chartered accountant
1982-1983: Price Waterhouse, Milan, Italy, working as an auditor on Italian companies and Italian subsidiaries of foreign companies
1983-1988: BOC Group Plc, a UK multinational focussed on gaseous chemicals and health care
1983-1984: Internal Audit Manager
1984-1986: Finance Director Specialty Chemicals Division
1986-1988: Finance Director, Health Care Group
1988-1994: Grand Metropolitan Plc, a global food, drinks and restaurant business
1988-1989: Commercial Director New Retail Ventures
1989-1991: Finance Director European Restaurants Division based in Munich, Germany
1991-1994: VP Corporate Controller - Burger King Corporation based in Miami, Florida
1994: Finance Director International Distillers and Vintners Asia Pacific Division
1994-1997: The Walt Disney Company - VP Finance and Development for European Retail Division
1997-1999: Finance Director for the London International Group Plc, a UK publicly owned company specializing in medical products
2000-March 2002: Finance Director for the Morgan Crucible Company Plc, a publicly owned advanced materials group with operations in more than 45 countries
Since April 1st, 2002: CFO of OMV

Head of Exploration and Production.

As of January 1, 2002 responsible for Exploration and Production. Mr Langanger
complemented his education at the Mining University in Leoben with a degree in economics in Vienna and joined OMV in 1974. He was appointed Senior Vice President for Exploration and Production in 1992. In this position he played a key role in building up the Group's international E&P portfolio.

Head of Gas.

Werner Auli graduated from the Technical University of Vienna and started his career in 1987 in OMV's department for company development and strategic control.

In 1990 he became assistant to the Executive Board for the areas of chemicals and materials.

In 1991 he became assistant to the Executive Board for the areas finance, controlling and chemicals.
From 1993 to 2000 Werner Auli was Managing Director of AUSTRIA Mineralöl GmbH, responsible for finance and accounting, controlling, marketing, IT and HR.

In 2000 he took over the management of the OMV Cogeneration GmbH and from 2001 to 2003, he additionally was responsible for the management of OMV Erdgas GmbH with the areas supply, marketing and distribution.

From 2002 to 2004 Werner Auli was Managing Director of EconGas, a 50% subsidiary of OMV, where he was responsible for finance, supply & trading, marketing and foreign distribution.
In 2004 he returned to the OMV Group, where he was chairman over and speaker of the Management Board of OMV Gas GmbH.

On January 1, 2006 he became Head of OMV Gas International GmbH.

Since January 1, 2007 he is a Member of the OMV Executive Board responsible for the Gas business.

Offices

OMV Gas GmbH
floridotower
Floridsdorfer Hauptstraße 1
1210 Vienna
Austria

OMV Austria Exploration & Production GmbH
Protteser Straße 40
2230 Gänserndorf
Austria

OMV Aktiengesellschaft
Repräsentanz Moskau  International Trade Center Krasnopresnenskaja nab.12/1004a
123610 Moskau
Russian Federation

OMV Exploration & Production GmbH
Gerasdorfer Strasse 151
1210 Vienna
Austria

OMV Exploration & Production GmbH
van Sickle Gesellschaft m.b.H
Bahnstraße 34
2183 Neusiedl/Zaya
Austria

OMV (ALBANIEN) onshore Exploration GmbH
Rruga: Deshmoret e 4 Shkurtit, No. 5
Kati 2 (Sky Tower)
Tirana
Albania

OMV (ALBANIEN) offshore Exploration GmbH
Rruga: Deshmoret e 4 Shkurtit, No. 5
Kati 2 (Sky Tower)
Tirana
Albania

OMV (ALBANIEN) Adriatic Sea Exploration GmbH
Rruga: Deshmoret e 4 Shkurtit, No. 5
Kati 2 (Sky Tower)
Tirana
Albania

OMV Australia PTY Limited
Level 29, St. Martins Tower
44 St. Georges Terrace
WA 6000 Perth
Australia

OMV (BULGARIA) offshore Exploration GmbH
1, "Sofiiski geroy" str.
Prima Business Center
1612 Sofia
Bulgaria

OMV (EGYPT) Exploration GmbH
c/o OMV Exploration & Production GmbH
Gerasdorfer Straße 151
1210 Vienna
Austria

OMV (FAROE ISLANDS) Exploration GmbH
c/o OMV (U.K.) Limited
14 Ryder Street
SW1Y 6QB London
U.K.

OMV (BAYERN) Exploration GmbH
Gerasdorfer Straße 151
1210 Vienna
Austria

OMV (IRAN) onshore Exploration GmbH
299, Dastgerdi Street
19678 Tehran
Iran

OMV (IRELAND) Exploration GmbH
c/o OMV (U.K.) Limited
14 Ryder Street
SW1Y 6QB London
U.K.

Petrom S.A. (BO Kazakhstan)
135, Abylay Khan ave.
48002 Almaty
Kazakhstan

OMV of Libya Limited
Zat el Imad Building
Tower 5
91867 Tripoli
Libya

OMV New Zealand LTD
Level 10, Deloitte House
10 Brandon Street
Wellington
New Zealand

OMV (NORGE) AS
Jåttåvågveien 7B
4020 Stavanger
Norway

OMV (PAKISTAN) Exploration Ges.m.b.H.
UBL Building, 7th Floor
F-6/1, Jinnah Avenue
2653 Islamabad
Pakistan

Petrom S.A.
1A Piata Eroilor Nr.1A
100316 Prahova Ploiesti
Romania

OMV (Tunesien) Exploration GmbH
53, rue du Lac Constance
Les Berges du Lac
1035 Tunis
Tunisia

OMV-Abu Dhabi
Corniche  Sheik Khalifa Energy Complex
Abu Dhabi
United Arab Emirates

OMV (Yemen Block S2) Exploration GmbH
Hadda District
Faj Attan
Sana'a
Republic of Yemen

OMV Italia s.r.l.
Via Enrico Fermi 2
37136 Verona
Italy