Strategy

The OMV 2025 Strategy builds on the proven concept of integration, which ensures strong cash flows and resilience. Significant milestones were reached since 2018: built a high-quality gas-focused asset base in Upstream and extended the portfolio into high-value chemicals by increasing the share in Borealis to 75%. The Group strategic ambition now focuses on chemicals growth, maximizing value through its existing portfolio and increasing the share of low- and zero-carbon products in the portfolio. OMV strives to substantially increase the clean CCS Operating Result and operating cash flow, before net working capital effects, to at least EUR 5 bn each by 2025.

Market outlook

Global energy demand continues to grow and will be met predominantly through traditional energy sources.

Global energy demand by primary energy sources

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The COVID-19 pandemic had a significant impact on energy markets worldwide in 2020, disrupting supply and demand dynamics. The global economy is now bracing for a multi-year recovery with a strongly divergent pace among different regions. In the short to medium term, energy demand will again grow but will be coupled with the possibility that some changes in consumer behavior may remain, especially in strongly affected sectors like tourism and aviation. 2020 can be considered a landmark year for the global energy transition, especially in the light of the European Green Deal, the growth of renewable energy, despite the crisis, and the fact, that many countries declared net zero carbon ambitions. This leaves a sustainable impact on the energy markets in the medium to long term.

Global energy demand will continue to increase following the outlook in the IEA Stated Policies Scenario (STEPS) which incorporates the impact of the existing policy framework and is expected to rise 9% by 2030, on account of GDP and population growth. Oil and gas demand continue to grow and will still account for about 55% of global energy demand. This expected growth trajectory might slow, however, if current emissions target announcements materialize and the energy transition results in declining fossil fuel demand. This trend is in accordance with the IEA Sustainable Development Scenario (SDS) showing a potential trajectory towards fulfillment of the UN climate goals factoring in high political ambitions.

Despite strong growth in renewables, oil will remain the main source of primary energy in the next decade, capturing a share of about 30% and exhibiting a compound annual growth rate of 0.5% by 2030. The increase in oil consumption will come from rising demand for petrochemical products as well as growing road and aviation transportation sectors in emerging markets. While oil product consumption is expected to decline in mature markets such as North America and Europe, global growth beyond 2030 will come from Asia, the Middle East and Africa. Driven by the global climate protection ambitions, the refinery industry is putting significant effort into partially replacing conventional oil feedstocks with bio-based feedstocks or recycled plastic materials. New technologies for producing alternative fuels, initially by means of pyrolysis or gasification are gaining traction. This will help producers contribute to global emissions reduction targets.

Natural gas will continue to be the fastest growing major energy source among fossil fuels, supported by strong global decarbonization policies and more stringent emissions standards. Gas demand will grow at an annual rate of 1.2% by 2030. This is attributable to the ability of natural gas to displace coal in the power generation sector. It also provides a reliable fuel source for the energy transition, serving as backup for the increasing share of renewables in the power generation mix.

Global petrochemical demand

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The growth in global demand for petrochemical products is closely linked to economic development as well as increasing prosperity and living standards in developing economies. Therefore, the growing petrochemicals market will continue to be an important consumer of oil and gas and a driver of global oil demand. Demand for olefins such as ethylene, propylene, butadiene, and benzene is expected to increase by 37% by 2030, mainly due to demand growth in Asia. These petrochemicals are considered to be the major building blocks for the chemical industry. Their derivatives, such as polyolefins, offer unique properties and economic benefits such as low material costs, as well as easy and fast processing. Petrochemicals are increasingly being used as a substitute for other energy-intensive materials due to their advantageous characteristics. They remain essential for various industries such as packaging, construction, transportation, healthcare, pharmaceuticals, and electronics. These sectors underpin the robust overall rise in demand, which stems primarily from the Asia-Pacific region and is aligned with the economic development there. Demand in mature markets such as Europe, North America, and Japan is expected to remain generally healthy in the long term in line with economic development, but growth rates are expected to slow down.

Naphtha, an oil derivative product, is expected to remain the main feedstock for the petrochemical industry. Other key feedstocks are associated gas in the Middle East and shale gas in North America. In addition, recycled products are becoming increasingly important feedstock that will help to better manage global plastic waste.