Exploration & Production

2030 strategic priorities

• Portfolio managed as a robust cash generator to support the Group’s transformation
• Production of at least 450 kboe/d is expected by 2025 and below 400 kboe/d by 2030, with an overweight on gas*The contribution from Russia is estimated to be around 80 kboe/d in 2025 and to be around 40 kboe/d in 2030. In light of the latest developments, OMV decided not to pursue any future investments in Russia and initiated a strategic review of the interest in Yuzhno Russkoye, including the possibility to divest. As a result, Russia is no longer considered one of OMV’s core regions. Any potential impact from this strategic review is not reflected in this target.
• Production cost below USD 7/boe
• Low-carbon business solutions developed, with around 10 TWh in renewable energy (e.g., geothermal) and 5 mn t p.a. CCS, to significantly reduce absolute and relative GHG emissions
• Portfolio optimization measures will be evaluated

In the context of the ongoing energy transition and to support OMV Group’s transformation, E&P will be managed as a robust cash generator and will focus on further upgrading its competitive asset portfolio, concentrating on the four core regions: Central and Eastern Europe, the North Sea, Middle East and Africa, and Asia Pacific. The shift of the hydrocarbon portfolio to gas will continue, with further divestment of non-core positions to improve efficiency, while the low-carbon business will be ramped up to achieve a material contribution by the end of the decade.

Boosting value delivery and cash generation are the main goals and criteria for managing and developing the portfolio of oil and gas assets, with a strong emphasis on gas. The delivery over the mid-term of key projects in the portfolio such as the Neptun Development in Romania, Jerun in Malaysia, and Umm Lulu SARB Phase 2 plateau extension in the UAE will support strong cash generation by and beyond 2025. With the current portfolio, OMV expects to maintain production levels of at least 450 kboe/d, with around 60% gas*The contribution from Russia is estimated to be around 80 kboe/d in 2025 and to be around 40 kboe/d in 2030. In light of the latest developments, OMV decided not to pursue any future investments in Russia and initiated a strategic review of the interest in Yuzhno Russkoye, including the possibility to divest. As a result, Russia is no longer considered one of OMV’s core regions. Any potential impact from this strategic review is not reflected in this target. by 2025. Thereafter, OMV expects to reduce its oil and gas production levels to below 400 kboe/d by 2030, keeping the overweight on gas*The contribution from Russia is estimated to be around 80 kboe/d in 2025 and to be around 40 kboe/d in 2030. In light of the latest developments, OMV decided not to pursue any future investments in Russia and initiated a strategic review of the interest in Yuzhno Russkoye, including the possibility to divest. As a result, Russia is no longer considered one of OMV’s core regions. Any potential impact from this strategic review is not reflected in this target.. The production decline will occur primarily in the second part of the decade, as no new large-scale projects (re-)developments are being pursued. In order to sustain the above-mentioned production levels, ramp up the low-carbon business, and deliver strong cash generation, E&P anticipates a total annual average CAPEX over the decade of around EUR 1.6 bn, EUR 0.6 bn of which is earmarked for low-carbon activities. OMV’s exploration and appraisal activities are being streamlined further, and the total annual average budget is expected to be around EUR 0.2 bn over the decade. Toward the end of the decade, oil and gas CAPEX and E&A expenditures will be reduced, thereby allowing for more capital to be allocated toward ramping up the low-carbon business and the broader OMV transformation.

E&P plans to reinforce the competitiveness of its portfolio and resilience against market volatility amid the rapidly changing demands of the oil and gas industry. The strong focus on operational excellence, fostered by digitalization and agile ways of working, in addition to portfolio optimization, will ensure that production cost remains below USD 7/boe beyond 2025.

The Gas sales business and logistics excluding OMV Petrom will be consolidated in the E&P business starting 2022. Over the next decade, European production will decline, while demand is expected to remain resilient. To close the supply-demand gap, OMV will continue to complement its own natural gas production in Norway, Austria, and Romania with long-term gas supply contracts from Russia and is working to identify and develop additional sources of supply. The equity gas contribution to the Gas sales business will decrease significantly toward the end of the decade in Northwestern region due to natural fields decline, and will largely be replaced with green gases, such as biogas and hydrogen, primarily obtained through trading, to reduce the carbon intensity of its product portfolio. New equity gas volumes from the Romanian Neptun project will keep volumes high in the Southeastern region. OMV will also aim to direct an increasing share of its natural gas sales to customers from non-energy sectors, such as the chemicals industry, to further reduce its Scope 3 portfolio emissions.

The Group will explore a range of opportunities and portfolio choices that enhance cash flow generated by the current Exploration and Production business and support a potential accelerated transition to sustainable fuels, chemicals, and materials. These opportunities may include capturing the full value potential of the asset base, e.g., low carbon business potential, maintaining reservoir production excellence and optimizing costs as well as assessing and developing joint venture opportunities for selected assets without excluding inorganic options.

To reduce its operations carbon footprint, E&P will pursue the phase out of routine gas flaring and venting, reduce fugitive methane emissions, and introduce portfolio optimization measures. In addition, renewable energy projects will also be pursued for the purpose of powering OMV’s own operations, such as the photovoltaic plant developed with VERBUND in Schönkirchen, Austria. To achieve overall reduction of both absolute and relative GHG emissions from its product portfolio, E&P will leverage its existing asset base and core skills to deliver financially strong low-carbon business projects. Available opportunities will be captured to build up geothermal heat capacity that generates up to 9 TWh p.a. by 2030. In addition to geothermal, a minimum of 1 TWh from renewable power will be developed in OMV core regions with favorable sun and wind conditions to serve captive demand, thereby reducing Scope 2 emissions by OMV’s own operations. E&P will further tap its existing reservoirs and (sub-)surface capabilities to implement opportunities that lead to a CCS storage capacity of approximately 5 mn t p.a. of CO₂ net to OMV by 2030. In addition, further opportunities where E&P can leverage its strengths and capabilities are being explored, e.g., hydrogen and energy storage, and will potentially be pursued in consideration of OMV strategic priorities.