OMV Gas & Power Strategy - wec-austria.at · OMV Gas & Power Move & More. OMV Gas & Power WEC Austria EA, Joint Board Meeting and 62th session of the GA Vienna, 08 April 2010

OMV Gas & Power

Move & More.

OMV Gas & Power

WEC Austria EA, Joint Board Meeting and 62th session of the GA Vienna, 08 April 2010

2 |OMV Gas & Power, Dr. Werner Auli, 08 April 2010

OMV is the leading energy provider in the European growth belt

The OMV 3plus strategy: Combination of our 3 strengths leads to sustainable growth

3 Markets - PLUS supply regions strengthening market position (and vice-versa)3 Divisions - PLUS expansion of the business portfolio towards sustainability3 Values: Pioneers, Professionals, Partners -PLUS synergies through leveraging integration

Regional focus

Expand downstream in our growth markets and connect to supply regions

Portfolio adaptation

Reduce carbon intensity and strengthen E&P and G&P businesses with power investments to enhance gas value

Costs/synergies

Strict cost and capital discipline. Realize cost and revenue synergies through integrated position


Natural Gas, the energy source of the near future

Facts

World gas demand is expected to growth 1.5% per year until 2030

Prominent role in a carbon-restrained world

Power generation sector is the key driver of gas demand

Cleanest fossil fuel

High efficiency

Flexibility needs due to renewable power plants

Further enhancement of markets (liquidity, flexibility, linkage)

Further development of technologies (e.g. shale gas)

World primary natural gas demand

Source: IEA World Energy Outlook 2009

-

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

2007 2015 2020 2025 2030

gas for power generationresidential, comm, agricultureindustry

non-energy useothers and GTL

bcm


Power generation drives OECD Europe gas demand increase

Incremental increase in gas demand 2007 –

2030

Source: IEA World Energy Outlook 2009

-50 0 50 100 150 200 250 300 350 400 450 500

Asia

Middle East

OECD Europe

E.Europe/Eurasia

Latin America

Africa

OECD North America

OECD Pacific

gas for power generationresidential, comm, agricultureindustrynon-energy useothers and GTL

bcm


Gas & Power: Long-term growth is expected

Sources: OMV analysis based on KBC (2009)Scope ITA & GER: gas –

South Germany & North Italy; power –

Germany

-5 % 1 1 % 4 %-2 4 % 2 5 % 1 1 %

o il g a s p o w e r

Growth 2010-15

Growth 2010-30

22%16%

61% 56%

gas power 40%46%

gas power

109% 218%

4%14% 11%

33%

gas power

Key drivers

Further electrification leads to high long-term growth of power demand especially in OMV markets

CO2 drives renewable power sector and need for flexible gas-fired power generation units

Further development of gas and power markets into traded markets

Increased liquidity

Integrated trading and optimization approach of players

Further liberalization

OMV markets


0

100

200

300

400

500

600

700

800

2008 2009 2010 2015 2020

Europe faces a gas supply gap after 2012

Growth of demand slows down in the short-term

Oversupply will not be an issue post 2012

Long-term demand forecasts indicate stable growth of gas demand

Growing demand mainly driven by power sector

Import dependency of Europe will increase

Indigenous production will decrease by 25% until 2015

Supply gap

Advanced projects

Imports contracted

Indigenous production

Total gas demand EU 27 + TR

bcm / Supply gap incl. advanced projects

Global Insight (2009)Cedigaz

(2009)Cera

(2009)

Demand forecasts

bcm

Source: OMV


International Player

Downstream market focus on European growth belt

Significant contribution to oil and gas supply in the OMV markets

Initiatives to connect supply regions with downstream markets

Baumgarten as international node for gas transit in the heart of Europe

Central European Gas Hub

Activities on main international gas hubs

Initiatives to expand gas infrastructure (storage, pipelines, LNG)

OMV’s international footprint

Portfolio of OMV AG

NBP TTF

NCG

CEGH


Nabucco will bring “fresh”

gas to OMV markets - Important milestone achieved in 2009

Intergovernmental Agreement (IGA)

Stable legal framework

Political agreement among the Nabucco transit countries (Austria, Hungary, Romania, Bulgaria and Turkey)

Guarantees full political support. Agreement is valid for 50 years

Ensures equal legal conditions for gas transit throughout the entire Nabucco pipeline system

Lays down transport tariff methodology and rules for network access

Establishes political committee comprising representatives of all signatory countries to support development of the project

All exemptions in place

IGA ratified in Austria, Hungary, Romania, Bulgaria and Turkey

IGA signing in Ankara on 13 July 2009


2011 2012 2013 2014 2015 2016 2017 2018 2019

Nabucco –

a strong supply line connecting OMV markets

Status

Conclusion of Project Support Agreements

IGA ratified in all transit countries

Execution of Environmental and Social Impact Assessment (ESIA)

Continuing detailed engineering

Financing negotiations with EIB, EBRD and IFC

Open Season process in 2010

Construction Step I

Phase 1 Phase 2 Construction Step II

Operation

Compressor station (planned) CEGH

Nabucco

Gas Pipeline


DONG

HuberatorGaspool

NCG

PSV

CDG

PEG

TTF

NBP

Trading hub

Gas Exchange launch in December 2009 –

an important

milestone for the further development of the market

Central European Gas Hub (CEGH)

CEGH to become a leading hubin Continental Europe and further increase liquidity in the region

CEGH trading volume rose to 22.8 bcm/y in 2009

Via swaps the gas transported via Nabucco can be transferred to all over Europe

In connection with EEX: Trading of gas and power

Central clearing by ECC

Standardization of gas trading activities

International clearing members active

Implementation of Futures Trading in 2010

European trading hubs

0

5

10

15

20

12.1

2.20

09

17.1

2.20

09

22.1

2.20

09

27.1

2.20

09

01.0

1.20

10

06.0

1.20

10

11.0

1.20

10

16.0

1.20

10

21.0

1.20

10

26.0

1.20

10

31.0

1.20

10

05.0

2.20

10

10.0

2.20

10

15.0

2.20

10

20.0

2.20

10

25.0

2.20

10

02.0

3.20

10

07.0

3.20

10

12.0

3.20

10

17.0

3.20

10

22.0

3.20

10

27.0

3.20

10

Historical Trade Development

Trades

Baumgarten

Day-Ahead Trades*

* The trading volume and the amount of trades are calculated in single count method and crossings are excluded.


Gas logistics provides the infrastructure basis for the growth strategy and stable cash flows

Gas pipelines

Transit system in Austria:increase capacity due to market needs and Nabucco volumes

Feeder lines to Nabucco

Storages

in sales clusters to provide more flexibility

Germany

Austria

Romania

Turkey

LNG

regasification to support diversification of supply

Gate terminal

Adria LNG

Gas logistics asset portfolio

Russia

Caspian

Middle East

Adria

WAG

TAG

Gate

North Africa

South Stream

Arab Gas

Pipeline

existing planned potential

Storage:

Nabucco

Blue Stream


Austria’s gas logistics infrastructure: European node and OMV’s backbone of the gas business

Infrastructure in 2009

Gas pipeline transportation capacity of 75 bcm in total

Storage working gas volume of2.33 bcm in total

New compressor station Weitendorf on TAG

Technical feasibility for storage Schönkirchen Tief finished

OMV’s operated gas infrastructure in Austria

Tallesbrunn

Schönkirchen

WAG

PentaWest

TAG

HAGThann

Baumgarten


Gas sales portfolio comprises three clusters with essential regional partners

Sales clusters EconGasLeading wholesale company in AustriaInternationalization on track (current share of international volumes: 37%) 8.3 bcm sold in 2009

PetromLeading wholesale company in Romania4.6 bcm sold in 2009Gas price regulation still an issue

Turkey40% stake acquired in Turkish gas company Enerco in 20092nd biggest gas sales and trading company in TurkeyLong-term gas supply secured for the Turkish gas-fired power plant


OMV adds gas-fired power generation to its portfolio

Strategic rationale

Gas-fired power generation drives the gas demand

Strong position of OMV in gas business (supply, trading, storages, pipelines)

Strategic thrust

Additional value creation through expanding the gas value chain to electrical power

Power strategy

Build up an asset portfoliowith gas-fired power plants and realize opportunities in renewable energy

Set-up an integrated asset backed wholesale and trading

Power plant projects

Gas-fired power plant project

Gas-fired power plant project (pre FID)

Screening of wind power market / projects


Gas-fired power plant project in Brazi/Romania

Capacity860 MW net = 2 x 280 MW gas turbine + 1 x 300 MW steam turbine

TypeCombined cycle gas-fired power plant (CCPP)

StatusFirst brick ceremony at Brazitook place on 03 June 2009Piling finished and foundation works ongoingMechanical construction ongoing

Construction of the electrical overhead line in progress

OMV Petrom

2009: Start of construction

2011: Start of commercial operation


Gas-fired power plant project in Samsun/Turkey

Capacity870 MW net = 2 x single shaft trains (gas turbine/generator/ steam turbine set) each 435 MW

TypeCombined cycle gas-firedpower plant (CCPP)

StatusOMV reached full ownershipGas supply contract secured Gas supply via Blue Stream Terminal and gas pipeline connectionGround preparation works startedPermitting ongoing

2009: Start of construction 2012: Start of commercial operation

OMV


Combining strengths of gas-fired and renewable power plants

Gas-fired CCPPsFlexibility “on demand”Additional outlet for gas sales (secure demand)Low investment costs per capacityAbility to flexibly operate on day-ahead and balancing marketLowest CO2 emissions of fossil fuel plants

Renewable power plants

Must-runners

Low/zero variable costs

Generation dependent on weather conditions

Low carbon footprint

Fastest growing energy segment due to changing energy map

Favorable regulatory setting


OMV as observer in the Desertec

Industrial Initiative

Short-Term initiativesDevelop a business plan, a feasibility study and a freely available Solar Irradiation Atlas Kick off program to demonstrate the practical feasibility

2050 Vision15% of the European power demand by 2050700 TWh/a transferred from MENA to various centers of demand in Europe; Total production in MENA: 4,000 TWh/yCover growing energy needs in MENA states


OMV in the new Headquarters

Head Office in “Viertel

2”

Easily recognizable and major architectural addition to the 2nd district

“Plus Zwei”: 8 floors/33 meters high

“Hoch Zwei”: 23 levels/80 meters high

Active symbol of the collaboration within the Group (1.590 people)

Interaction of people and departments


Thank you for your attention!

OMV Gas & Power Strategy - wec-austria.at · OMV Gas & Power Move & More. OMV Gas & Power WEC Austria EA, Joint Board Meeting and 62th session of the GA Vienna, 08 April 2010

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