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1 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014

OMV Refining & Marketing

Increasing refinery profitability and middle distillate production in this challenging climate Antwerp, 31st January 2014


Legal Disclaimer

This presentation is prepared in order to outline our expression of interest. Nothing in this presentation shall be construed to create any legally binding obligations on any of the parties. Neither party shall be obligated to execute any agreement or otherwise enter into, complete or affect any transaction in relation to this presentation.

All figures and information in this presentation are strictly confidential, they are by no means binding and thus indicative only.

© 2014 OMV Aktiengesellschaft, all rights reserved, no reproduction without our explicit consent.


1. Introduction to OMV

2. Current and Future Challenges

3. Options to Overcome

4. OMV’s Answers in Schwechat Refinery


Refineries in Austria, Germany, and Romania with total capacity ~17.3 mn t/a Germany: Burghausen (3.5 mn t), BayernOil share in sale (4.5 mn t)

Austria: Schwechat (9.6 mn t)

Romania: Petrobrazi (4.2 mn t)

20% market share in the Danube region High product quality and environmental standards Strong retail brand and high-quality, innovative

non-oil business (VIVA) Active in 11 countries with around 4,300 filling

stations in 2013 (incl. Petrol Ofisi) Total ~ 3,300 employees

OMV Refining & Marketing as European company is supplying over 200 mn people with energy

OMV filling station network


Schwechat Refinery – The 10 mn t refinery in Austria Complex refinery for flexible crude intake 10% crude share from Austria Product pipelines District heating connection Petrochemical integration Diesel/Petrol ratio reflects Austrian demand

Total product output 2012: 8.19 mn t

Jet A1

Diesel fuels

Heating oil extra light

Petrochemicals

Gasoline

Bitumen

Heavy heating oil

Light heating oil

Other

20%

12%

8%

40%

7%

5%

1%

3%

4%


The OMV Refining & Petrochemicals Vision & Mission

Our Vision We are the most valued manufacturer of fuels and petrochemicals

and enable society’s mobility and economic prosperity in our markets.

Our Strategy We continuously extend our

cost & performance leadership, foster integration & flexibility

of our operations and make selective solid return investments.

Our Mission & Values We stand for world class refining performance

and continuously develop our people and assets to leverage our upstream, marketing & petrochemicals integration – safely, sustainably and with superior

profitability. With our innovation portfolio we combine customer needs with economical and environmental benefits.


Year-to-date, European Net Distillate imports have averaged 700 kb/d in 2013 (through August), compared with 830 kb/d in 2012 and 1.1 mb/d in 2009.

Russia remains main supplier, providing 430 kb/d so far in 2013.

Increasing Diesel volumes coming from US (190 kb/d) and India (140 kb/d), sometimes US is surpassing Russia as key European supplier.

Europe represents less than a quarter of total US distillate exports, but share rising.

Europe's petrol exports to the US are decreasing to a current level of 300 kb/d

Refining in Europe is facing global competition. Import pressure is increasing, export markets are vanishing

source: IEA, Refining Forum, 27th Nov. 2013

source: IEA, Refining Forum, 27th Nov. 2013

-2000

200400600800

100012001400

2004 2006 2008 2010 2012 2014

US

petr

ol im

port

(k

p/d)

US total petrol importUS petrol import from OECD Europe

-200-100

0100200300400500600700

2004 2006 2008 2010 2012 2014EU D

iese

l im

port

(k

p/d)

IndiaRussiaUSA


Diesel to petrol ratio in Europe in 2012

The middle distillate-to-petrol ratio is increasing, continuously, albeit there are regional differences

Middle distillates / Petrol ratio incl. biofuel in EU 27 + 2 mass based

souorce, Eurostat, National Statistic Agencies, Oil Industry Associations, KBC , and OMV, source: CONCAWE 2013

Diesel car sales have doubled in Europe compared to 2000.

Light duty vehicle efficiency improvements lead to less fuel consumption.

Heavy duty transport is increasing, but efficiency gains compensating midterm higher diesel fuel demand.

5.61

0.72

AT 3.6

2

4

6

8

2000 2005 2010 2015 2020 2025 2030

+159%


EU refinery energy costs

30

35

40

45

50

55

60

65

70

2015 2010 2005 2000 1995 1990

energy cost share [% of total OPEX]

year

EU

The share of energy costs in total OPEX increased continuously since 1992 across Europe to more than 60 %. Within 18 years, the share increases by 67 % A further increase is anticipated. Carbon costs – despite they are quite low today –

have to be added.

Feedstock and energy prices are significantly higher than in North America leading to less competitiveness in a global business.

Today, energy costs are 60 % of total operating costs in Europe

source: own data and CONCAWE „Refinery Energy Systems“, 2012


EU 20-20-20 targets are the primary drivers for current and planned set of legislation.

The plans to amend/change directives create uncertainty. Emission Trading Scheme (ETS), Renewable

Energy Directive (RED), and Fuels Quality Directive (FQD)

Transposition in national laws usually creates non-harmonisation (e. g. bio-quotas across Europe).

Legislation in the EU compared to other regions increase uncertainty and costs for refining operations.

Investments to stay in business with no actual return of capital employed are required.

source: European Commission, EUROPIA 2012

EU Energy Strategy ‘11-‘20

Energy Infrastracture Package ‚’10

Energy Efficiency Action Plan ‚’11

Energy Efficiency Directive ‘12

Fuels Quality Directive ‘ 09

Renewable Energy Directive ‘09

Medium Combustion Plant ‘13

European Trading Scheme ‘09

Industrial Emissions Directive ‘10

Energy

Transport

Climate

Environment

Until 2020, the legal landscape for European refining industry is still not fully defined

Policy issues in progress (not exhaustive)

Clean Power for Transport ‘13

Carbon Leakage Review ‘13

Large Volume Organic Chemicals BREF ‘13

Refining BREF ‘08

Backloading ‘14

Cross Sectorial Correction Factor ‘13

FQD Crude Differentiation ‘11

RED&FQD Cap and ILUC ‘13

enforced EU legislation

EU legislation in progress


Europes ambiguous targets potentially plot the future oil demand

European oil demand [Mtoe]

source: European Commission, EUROPIA 2011 based on IEA and CONCAWE data

2020

• 20 % CO2 reduction • 20 % energy efficiency • 20 % renewables • 10 % renewables in transport

2030 • 40 % single CO2 reduction target • 27 % renewable energy target on EU level • no energy efficiency target

2050 • 80-95 % CO2 reduction • 60 % CO2 reduction in transport

power fuel & losses non energy & other

industry buildings marine

aviation road & rail

2050 scenarios

286 281 239

63

155314

2030

605

2020

654

2009

681

2050 IEA Blue Map

2050 NPS extrapol.

EUROPIA

474


Development of operating rate w/o further CDU closures after 2015

Reduction in capacity and/or utilisation as result of weakening demand, increased import pressure, and vanishing outlets

1.7 mb/d refinery closures in Europe since 2008

source: CONCAWE 2013 source: IEA, 2nd Refining Forum 2013

If no further capacity reduction takes place, EU’s refinery utilisation will drop by 15 % in 2030.

Beside 1.7 mb/d refinery closures since

2008 in Europe, many refineries have changed ownership.

70

72

74

76

78

80

82

84

86

Utilitsation [%]

Cap

acity

&

Thro

ughp

ut

[Mt/a

]

-15%

2008 2010 2025 2020 2015 2030

Capacity Throughput Utilisation 0

200

400

600

mbb

l/d

2013 2012 2011 2010 2009 2008 2014

IT FR CZ

UK

DE


The EU needs an increase in conversion units to handle the tightening diesel-petrol-ratio EU27+2 Refinery Projects 2009-2015 Capacity change by process unit versus year-end 2008 Capacity change

source: CONCAWE 2013

additions

reductions

H2U (*10) HDS VIS COK FCC RHC DHC REF VDU CDU


Petrochemical refinery integration (cracker) in Europe

An increase in integration is one opportunity to take advantage of local and global flexibility Downstream integration is the dominant business model in Western Europe

source: EUROPIA, 2012 source: AT Kearny, 2012

0 100 80 40 20

7

4

31

17 12

Western Europe

16

59

7

18

Asia Pacific

36

51

1 12

North Ameria

40

41

2

Ref

iner

y in

tegr

atio

n 20

11 [%

]

14

82

7

43

Eastern Europe

Others Middle East

CDU capacity [mb/d]

Merchant refiner Upstream integration

Vertical integration Downstream integration


Energy efficiency of refineries

0

50

100

150

FSU Middle East

Asia Export

EU Eastern US and

CAN

Ene

rgy

Inte

nsity

Inde

x Energy efficiency must be a key competence

Energy consumption with and without efficiency improvements in EU refining

source: CONCAWE 2013 source: Solomon 2011 in Clingendael 2012

95

100

105

110

115

120

125

1990 1995 2000 2005 2010

Ene

rgy

cons

umpt

oin

MJ/

t net

inpu

t (in

dexe

d to

100

in 1

992)

10%

energy consumption w/o improvement energy consumption


Intermediates and semi-finished product trade flows have a significant share in refinery optimisation and brand position

3 sites – 1 refinery

Burghausen

3rd Party/Bayernoil Petrobrazi

Schwechat

E&P OMV’s refining network optimisation

utilises high volume trade of intermediates across Europe. This is complemented by trades with other companies.


OMV’s petrochemical complex Schwechat Burghausen

FCC plant Metathesis

Ethylene plant Ethylene plant

Butadiene plant (2015)

Butadiene plant (Revamp 2014)

Aromatics Extraction

Propylene/propane

Crude C4

Butadiene

Propylene

Benzene rich gasoline cut

Ethylene

Propylene

Ethylene

Butadiene

Propylene

Benzene

Ethylene/Crude C4

Crude C4

naphtha naphtha FCC plant


Shutdown in May/June 2012.

Maximized integration value from conversion of Romanian crude only Streamline refining nameplate capacity to

process 100 % domestic crude Projects include upgrade, running business,

safety and compliance

Full yield conversion to be finalized by 2014 as soon as Vacuum gasoil (VGO) conversion in place

Petrobrazi modernization program fosters upstream integration, increases middle distillate yield, and improves efficiency

Substantial value contribution [yield %]

Petrobrazi modernisation impressions

: 52in transfer line fit up

53 35

~45

Yield 2011 12

~10 ~45 Yield 2014

Middle distillates Other Own crude consumption


Schwechat turns the „black ball“ into high value products:

Standard Quality Bitumen

SQB: Standard Bitumen HQB: High Quality Bitumen

HFO: Heavy Fuel Oil VHFO: Very Heavy Fuel Oil

residue

HFO

SQB

HFO


HFO

HQB

SQB





residue

H

F

O

High

Quality Bitumen

SQB SQB

BITUROX HQB

HFO

Gasification (high invest)

Low rate of return (stand alone)

Over compliance towards NOx, SOx

Increase of CO2 emissions (stand alone)

Thermal Cracker (moderate invest)

Economic HFO-decoupling

Insignificant emission increase

Upgrading for final revamp

Residue Hydrocracker (high invest)

Low rate of return

No sustainability towards NOx, SOx

Essential increase of CO2 emissions

All investments require

environmental measures.


HQB

HFO

HFO

SQB





residue HFO

H

F

O

High

Quality Bitumen

Gasoline

Diesel

Gasoline

Diesel

SQB SQB

VHFO Electricity &

Steam SNOx

BITUROX

TGU

HQB


High flexible and high efficient TGU coupled with a gas turbine and power plant connection makes OMV’s plant unique Twice the conversion rate of a visbreaker. Highly flexible regarding crude grade,

though yields depend on crude quality. Gasoil and naphtha can be processed in

existing units. No high-pressure hydrotreater needed. Highly energy efficient.

Plant characteristics

Type of plant and yield structure heavy fuel oil conversion with integrated gas turbine

Approx. yield structure 5 – 12 % petrol 25 – 30 % diesel 55 – 65 % very heavy fuel oil electricity as by-product

Capacity 700 kt/a

Motive for construction heavy fuel oil reduction

Power


Low operating costs Energy saving by direct production of sulfuric acid

(reduction of life cycle costs) High heat recovery rate

H2SO4 as valuable product from flue gas treatment

Practically no limitation on sulfur in crude oil High plant availability No risk of catalyst damage for DeNOx catalyst High efficiency treatment system

Desulfurization (DeSOx): 95% - 99,7% Denitrification (DeNOx): > 95%

No solid waste from flue gas treatment Ash from Electric Precipitator is utilized in metal

industry (Ni, V)

SNOx - Efficient flue gas cleaning reduces crude oil costs


Strong business integration, further increased asset utilization, and superior diesel-petrol-ratio

Source: Annual reports, OMV analysis.

Competition 2012 1 OMV 2012 OMV 2015


1 OMV’s European competitors: BP Europe, ENI Europe, Exxon Europe, Lotos, MOL, Neste, NIS, Phillips 66 Europe, PKN. Orlen, Repsol Europe, Rompetrol, Shell Europe, Total Europe, Tupras.

E&P Refining

Retail

Petrochemical

Refining

Petrochemicals sales vol. % of refining capacity

Retail sales vol. % of refining capacity

Own crude oil % of refining capacity

Refining

Refinery utilization rate

>25% 18%

12%

>47% 42%

24%

>13% 10%

6%

~90% 88%

79%




BACK-UP


OMV has successfully established it’s premium diesel brand. Solely produced in Schwechat Refinery.

In summer min. 60 cetane guaranteed.

In winter, cold flow plugging point max. -35 °C.

High quality bio-component.

High performance additivation.


Total material usage (crude oil & intermediates) in the Burghausen Refinery Since 2008: 4,4 Mn tons

(previously: 3,5 Mn tons) Equalizes increase of more then 25%

New, revamped, and changed units propylene splitter cracker furnaces ethylene unit tankfarm logistics & utilities ethylene pipeline HDS revamps coker revamp metathesis

Yield shift to high value chemicals: Total Monomer Concept incl. Europe's 1st metathesis.

8

35

229

55

275

33

Yield increase [%]

pet coke

jet

diesel

benzene

propylene

ethylene

metathesis

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