Published June 19, 2012

OMV Petrom Strategy Update 2021: Sustainable performance for growth

OMV Petrom Strategy Update 2021, (0.38 MB, PDF)

Strategic directions for 2021: Maximize portfolio value and capture growth opportunities in upstream while optimizing mid- and downstream operations
Continue to invest in a competitive, investment-friendly regulatory and fiscal environment to sustain performance and position for growth in upstream
OMV Petrom’s strategic directions match the OMV Group strategy and address the needs of the Romanian energy sector

OMV Petrom, the largest oil and gas producer in Southeastern Europe, announces its strategic directions for 2021, as approved by the Supervisory Board on June 15, 2012.

Mariana Gheorghe, CEO Petrom: "Petrom’s strategic directions for 2021 reconfirm those outlined in the previous Strategy for 2015, ensuring continuity in the company’s development, and match the OMV Group strategy for 2021. Petrom aims to remain the leading regional, integrated oil and gas company with sustainable performance needed to support potential upstream growth in the neighboring Black Sea region. We believe Romania has a significant energy supply potential, which can reduce its dependency on imports. Petrom is well positioned to support the energy sector, thus contributing to economic growth in Romania."

Petrom’s strategic directions have been updated based on a comprehensive analysis of the Romanian energy sector and considering the sector’s international and regional developments. Oil and gas consumption will continue to grow and account for 60% of energy demand in Romania by 2021.

With a current share of imports of 20-30%, Romania’s relative energy independence is likely to decrease, with imports expected to increase to 40-50% by 2030 due to higher primary energy demand and natural decline in domestic hydrocarbon production. However, Romania has a large energy supply potential, which can be unlocked with significant investments, out of which, only to unlock the hydrocarbon potential over EUR 20-35 bn are required by 2030.

Petrom 2021: "Sustainable performance for growth"

We aim to remain the leading regional, integrated oil and gas company with sustainable performance to support potential upstream growth in the neighboring Black Sea region

Exploration and Production (E&P): Maximize current portfolio value and position for growth
Exploration and Production continues to be the company’s backbone and the focus over the short-term will be on stabilizing conventional production to largely offset natural decline, and on achieving operational excellence. For this purpose, the company will: i) continue field redevelopment projects, ii) explore and develop near field opportunities, iii) apply state of the art technologies and iv) optimize the E&P portfolio through partnerships.

To enhance its medium-term value, E&P will continue with: i) activities to increase the ultimate oil and gas recovery, ii) exploration, appraisal and development of the Neptun gas discovery in the Black Sea, if commercial viability is confirmed and iii) the exploration of deeper and frontier hydrocarbons.

E&P will strive to position itself for long-term growth by exploring the neighboring Black Sea region and unconventional opportunities.

Gas and Power (G&P): Enhance the value of equity gas
In the short term, G&P activities will focus on bringing the Brazi CCPP (860 MW) on stream in the second half of 2012. To further enhance the value of the gas portfolio, Petrom will seek to strengthen its gas sales and leverage fair market conditions. In the medium to long term, we will explore renewables opportunities and assess further infrastructure investments around the Nabucco gas pipeline project. Also, we will explore the development of a potential gas hub.

Refining and Marketing (R&M): Optimize integrated equity oil
In R&M, the modernization of our upstream refinery Petrobrazi will be finalized by 2014 and we will continue to improve our operations, reduce costs and increase efficiency. Additionally, we further enhance our supply network with modern storage facilities to fully support the retail network. Petrom will undertake continuous business review and portfolio measures (partnerships and divestments of non-core/non-economical units) based on market conditions and network performance.

Successful strategy implementation
To successfully implement our strategy in the coming years, Petrom will continue to invest at a similar pace as in the past to support the company’s future growth. In the last seven years, Petrom has invested more than EUR 1 bn p.a. (more than 90% of its EBITD) in order to transform the company and improve its performance. Considering the large exposure of Petrom’s portfolio to volatile oil prices, an investment-friendly environment with predictable, fair and transparent fiscal and regulatory regimes is needed to achieve our strategic objectives and to realize the envisaged investments.

Building on a foundation of successful transformation over the last years, Petrom has proven strong execution capabilities to deliver on its strategic objectives.

Petrom will focus on key enablers to deliver on its strategy – people and sustainability. On the people dimension, the focus will be on developing a performance-based organizational culture and a strong skill pool. Equally importantly, we seek to develop a sustainability culture for efficient use of natural resources and to share value with stakeholders for common long-term benefit.

The information herein represents the strategic directions of OMV Petrom and may be interpreted as forward looking statements subject to uncertainties, risks and regulatory changes which may cause the actual results/performance of OMV Petrom to be materially different .Under no circumstances may be deemed as representation/warranties of OMV Petrom or of its management regarding the company’s’ future results as well as a recommendation/ offer / invitation to subscribe for or purchase any securities.