16 – Equity-accounted investments

Material associates and joint ventures

Following the Initial Public Offering (IPO) on June 3, 2022 the shareholding in Borouge PLC (PLC) has changed to Borealis owning a 36% stake in Borouge PLC and Abu Dhabi National Oil Company owning 54% respectively. The Borouge 4 project, which is currently being executed, has not been part of the offering. It is intended to recontribute Borouge 4 at a later point in time. PLC is registered in Abu Dhabi and is the holding company for its 100% interest in Abu Dhabi Polymers Company Limited (Borouge) (ADP) and its 84.75% interest in Borouge Pte. Ltd. (PTE). Before the IPO OMV held a 40% stake in ADP, which also included the Borouge 4 project, and a 50% stake in PTE. In 2022, OMV’s share in PTE changed, following the IPO, from a 50% (direct) share in 2021 to a 45.76% share (15.25% direct share and 30.51% indirect share through PLC). For the impact on the consolidated income and cash flow statement refer to Note 3 – Changes in group structure.

As of December 31, 2022, the fair value of the Group’s interest in PLC, which is listed on the Abu Dhabi Securities Exchange of United Arab Emirates (UAE), was EUR 6,989 mn, based on the quoted market price available on the stock exchange of UAE. The corresponding book value of PLC was EUR 3,944 mn as of December 31, 2022.

The “Borouge investments” (representing total OMV share in PLC, ADP, PTE) are a leading provider of innovative, value-creating plastic solutions for energy, infrastructure, automotive, healthcare and agriculture industries as well as advanced packaging applications and also responsible for marketing and sales of the products produced.

Due to the restructuring of the Borouge entities triggered by the IPO in 2022 the previous control assessment was revised. Given the fact that no Board Reserved Matters, which are affecting all relevant activities, can be decided without an affirmative vote of Borealis, OMV has joint control over the three investments. Furthermore, it was concluded that already in previous years joint control was exercised and therefore the presentation within this Note was adjusted accordingly (included in below tables as ‘joint venture’ instead of ‘associate’).

Bayport Polymers LLC, registered in Pasadena (incorporated in Wilmington), successfully started its operations of the new one million ton-per-year ethane cracker at the Port Arthur Refinery and is currently building a polyethylene unit in Pasadena with the target to deliver a broad range of products to meet the growing global demand of sustainable and high energy efficient plastic products. As OMV has joint control over Bayport Polymers LLC (50/50 share split) and rights to the net assets, it therefore accounts the company as joint venture.

OMV also holds a 15% (2021: 15%) interest in Abu Dhabi Oil Refining Company, registered in Abu Dhabi, which runs a refinery hub with integrated petrochemicals. According to the contractual agreement between the shareholders, OMV has strong participation rights which represent significant influence as per IAS 28 definition. In 2022, a net write-up of EUR 67 mn was recognized in ADNOC Refining and Trading CGU (in 2021 impairment of EUR 669 mn). For further details please refer to Note 7 – Depreciation, amortization, impairments and write-ups.

The tables below contain summarized financial information for the material associates and joint ventures.

Individually immaterial associates and joint ventures

OMV holds 55.6% (2021: 55.6%) of Erdöl-Lagergesellschaft m.b.H (ELG), registered in Lannach, which is holding the major part of the emergency stock of crude and petroleum products in Austria. In spite of holding the majority of voting rights in the general assembly, OMV does not have control over ELG. The significant decisions on the financial and operating policies are delegated to the standing shareholder’s committee in which a quorum of two thirds of the share capital is required for decisions.

Since March 2022, OMV has 40% interest through Borealis in Borouge 4 LLC, registered in Abu Dhabi. The company executes the ongoing Borouge 4 project by developing an ethane-based steam cracker, two polyolefin plants, a 1-Hexene unit, a cross-linked polyethylene plant (XPLE) and an in-depth study for carbon capture unit. It was previously part of the 40% direct interest in ADP but scoped out of the IPO in June 2022, as described above, and therefore transferred to this newly founded company. However, it is intended to recontribute Borouge 4 at a later point. Given the fact that no Board Reserved Matters, which are affecting all relevant activities can be decided without an affirmative vote by Borealis, OMV has joint control over Borouge 4 LLC and accounts for it as joint venture.

OMV exercises joint control over Abu Dhabi Petroleum Investments LLC (ADPINV, OMV’s interest 25%, 2021: 25%), registered in Abu Dhabi, and Pak-Arab Refinery Limited (PARCO; indirect interest of OMV amounts to 10%, 2021: 10%), registered in Karachi, and accounts both investments at-equity. ADPINV is a holding company for its 40% interest in PARCO. As unanimous consent of the parties is required for decisions about relevant activities and OMV has rights to the net assets based on the legal structure, OMV classified the companies as joint ventures according to IFRS 11.

In June 2021, OMV subscribed through Borealis to a new share issue, thus acquiring 10% in Renasci N.V., a company incorporated in Belgium. On November 9, 2022 as a result of the debt conversion into newly issued shares, OMV has increased its stake in Renasci N.V. from 10% to 27.42%. The nominal amount of the loan converted was EUR 24 mn. Renasci N.V. is principally engaged in the development of the proprietary processes and know-how about various technologies regarding waste treatment and recycling. Through the shareholder agreement, Borealis is guaranteed two seats on the board of Renasci N.V. and participates in major significant financial and operating decisions. The Group has therefore determined that it has significant influence over this entity. Therefore, the investment is accounted for as an associated company.

Furthermore, OMV has a 10% interest (2021: 10%) in Pearl Petroleum Company Limited, registered in Road Town, British Virgin Islands, which is involved in exploration and production of hydrocarbons in the Kurdistan Region of Iraq. According to the contractual agreement between OMV and Pearl Petroleum Company Limited (Pearl), OMV has significant influence within the meaning of IAS 28, as unanimous consent is required for some strategic decisions. Therefore, Pearl is accounted for using the equity method although OMV’s share is just 10%.

For further details, please refer to Note 38 – Direct and indirect investments of OMV Aktiengesellschaft.