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Investing in S EE – OMV´ s Approach for the Region

Investing in S EE – OMV´ s Approach for the Region. Athens, November 3rd, 2005. Investing in SEE – OMV´s Approach for the Region. OMV´s strategic development path Materializing OMV´s strategy Preconditions and environmental requirements. OMV Strategy 2010.

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Investing in S EE – OMV´ s Approach for the Region

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  1. Investing in SEE – OMV´s Approach for the Region Athens, November 3rd, 2005

  2. Investing in SEE – OMV´s Approach for the Region • OMV´s strategic development path • Materializing OMV´s strategy • Preconditions and environmental requirements

  3. OMV Strategy 2010 OMV is the most successful company in capitalizing on the EU „growth belt“ in oil and gas and securing the future supply through a strong upstream position.

  4. OMV Develops Along the EU Growth Belt • Expand from mature into growing markets • Increase the lead to other regional competitors • Further boost profitability potential • Continued growth East- EuropeanGrowth Belt Mature Markets

  5. Free Float 6.23% EBRD 2.03% OMV 51.00% State 40.74% Petrom Acquisition in December 2004 • OMV acquired 51% of Petrom with immediate control • 33.34% of Petrom from Government for EUR 669 mn • Increased to 51% via simultaneous issue of new shares for EUR 830 mn • Capital increase remains in Petrom for future CAPEX • Government indemnity for historic contamination • Agreement provides scope for rationalisation • Contractual fiscal stability in upstream • Petrom’s new shareholder structure

  6. Romania Arpechim 3.5 mn t Petrobrazi 4.5 mn t Serbia Bulgaria Petrom – A Perfect Strategic Fit • Daily oil and gas production of 217,000 boe/d (6m/05) • 50% oil – 50% gas • Oil and gas reserves of 1,025 mn boe (Dec. 31, 2004) • 60% oil – 40% gas • Gas Sales of around 6 bcm (2005 estim.) • 35 % of Romania´s primary energy consumption covered by natural gas • Increasing demand (from18,5 bcm in 2005 to 20,5 bcm in 2015) • New refining capacity in the East of D-13 • 670 retail stations • Market share in Romania >30% • Through the acquisition of 51% of Petrom, OMV became the undisputed leading integrated oil and gas group in Central and Eastern Europe

  7. Nabucco - Project Partners • OMV • OMV Gas GmbH, Austria • MOL • MOL Natural Gas Transmission Ltd., Hungary • Transgaz • S.N.T.G.N. Transgaz S.A., Romania • Bulgargaz • Bulgargaz EAD, Bulgaria • BOTAS • Botas Petroleum Pipeline Corporation, Turkey

  8. Nabucco Gas Pipeline Project Strategic Goals of Project • Opening a new gas supply corridor for Europe from Middle East and Caspian regions • Raising transit profiles of participating project countries • Contribution to security of supply for partner countries and for Europe as a whole • Strengthening the turntable position of Austrian pipeline grid and the Hub Baumgarten within the European network

  9. Feasibility Study Phase – Findings Technical Study Construction O p e r a t i o n • 3,300 km + Compression • Capacity: up to 25.5 bcm

  10. Nabucco Gas Pipeline Project Next Steps Within the Development Phase • Prequalification for Tender process for the Basic and Detail Engineering • Working program for EIA/SIA together with IFC, EBRD, EIB • Application for exemption to safeguard the economics of the project on the basis of EU Directive and / or ECSEE Treaty • Extension of the Nabucco Consortium by one or more additional shareholder • Start of negotiations transportation contracts

  11. Key Success Factors for Investments in SEE (1) • Harmonize legal framework in SEE • To reach a sound investment climate in the region • To establish a common European framework – jointly approach for all EC 25 • Stabile and predictable investment conditions • Long term investments in infrastructure projects need sufficient reliability for the investors • clear definition of interest rate level to safeguard the economics of the project • security about negotiation principles and -structure • Exemption and Intergovernmental Agreement

  12. Key Success Factors for Investments in SEE (2) • Complex transformation process of societies in SEE • Alignment of the former communist society systems – democratization and privatization – to the EC legal system in all areas • Cooperation to create win-win-situations • Investments in SEE economies • Modernization of existing / creation of new infrastructure • Enhance integration of EC energy market – new transit routes • Increase security of supply

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