Interview with the Chairman of the Executive Board

“We think in terms of opportunities. OMV is investing in the circular economy and sustainable projects.”

A conversation with Alfred Stern, Chairman of the Executive Board and CEO of OMV

Can you summarize in one sentence what 2023 was like for OMV, Mr. Stern?

We achieved the second-highest result in the Company’s history.

How did you manage that?

Our Strategy 2030 is taking effect. All three business segments contributed to the positive result in 2023. Energy in particular was extremely profitable – despite declining energy prices. Fuels & Feedstock also performed well. In Chemicals & Materials, we felt the economic downturn and overcapacity on the market.

2023 was again a year of geopolitical tension. How do you handle this as Chairman of the Executive Board?

Above all else, I hope that the wars around the world will end. So many people are suffering. It’s a terrible situation that touches and moves me. But when I’m at work, I try to block out my emotions as much as possible, and instead focus on what I can influence. On things that OMV itself can have an impact on.

What does that mean specifically for OMV’s business?

A positive mindset is important. We think in terms of opportunities. The environment may be challenging, but there are always business opportunities in every crisis. We’re focusing on both at OMV: on crisis management, which served us well last year, and at the same time, we have the expansion of our promising business segments firmly in our sights. We are shifting our investments over to the circular economy and sustainable projects.

What are your main focal points in OMV’s transformation?

We are allocating on average around 40 percent of our global investment budget annually to sustainable technologies and solutions. In 2023, once again, we got some innovative projects off the ground. For instance, our joint venture “deeep.” With this project, we will be able to supply up to 200,000 households in Vienna with climate-neutral geothermal district heating in just a few years. Another example is Sustainable Aviation Fuel, also known as SAF. This sustainable fuel made from used cooking oil helps to reduce CO₂ emissions from air travel by over 80 percent compared to conventional kerosene.

How much growth do you expect for sustainable fuels?

It’s clear that the need for environmentally friendly mobility is on the rise. We are working on the assumption that demand for sustainable fuels will triple over the next 20 years. By 2030, we want to increase annual production of sustainable fuels and chemical feedstock to up to 1.5 million tons. A significant proportion of this will be SAF. Interest from industry is huge: last year, we concluded further SAF offtake agreements with major aviation companies such as Ryanair and Air France-KLM. But this is just one side of the coin. We are also decarbonizing passenger transport.

Many car drivers are familiar with OMV filling stations...

These are the customers we’re thinking about. We launched OMV eMotion for them in 2023. Under this brand, we’re building a comprehensive network of high-performance charging stations for electric vehicles. By 2030, our customers will have access to a total of 2,000 new charging points across OMV’s European retail network. They will then be able to charge up with green electricity at OMV filling stations and other locations in Austria, Romania, Slovakia, and Hungary.

You mentioned the circular economy. What is OMV’s understanding of this?

Our solutions for the circular economy are shaped by one basic principle: converting waste into valuable feedstock. One example is Europe’s largest sorting facility for mixed plastic waste in Walldürn, Germany, which is expected to become operational in 2026. The plant will make it possible to process used plastic that otherwise would have been sent to landfill or incinerated. This material can then be converted into valuable secondary raw materials using our patented ReOil® technology for chemical recycling. The ReOil® plant is currently being built at our Schwechat refinery and should start up this year. As you can see, our approach creates an actual cycle that will reduce CO₂ emissions.

At the same time, OMV is still active in the fossil energy sector. How does that fit into your sustainability strategy?

As part of the sustainable energy transition, we need a healthy dose of realism. The shift over to renewable energies won’t take place overnight. Natural gas is an important bridging technology in this scenario. Our understanding is that market demand will remain intact over the next 20 years. That’s why we need to balance out short- and mid-term goals in a responsible way. Our approach is to gradually replace fossil-based energy sources. Until that time comes, OMV will remain a reliable supplier. Generating our own energy in Europe is the best way to help ensure the security of supply. We also want to make a contribution, for example through our project Neptun Deep.

You’re referring to the drilling in the Black Sea in Romania?

Yes, exactly. OMV Petrom and Romgaz are jointly investing up to 4 billion euros there. In future, it could supply around 100 billion cubic meters of natural gas. Last year, we made huge progress, with over 80 percent of the implementation agreements having now been agreed. Well-known international contractors and suppliers have been enlisted, all of which have the required skills and experience to implement this complex project. Drilling is scheduled to start in 2025, with first production expected in 2027. Thanks to Neptun Deep, Romania will become the EU’s main producer of natural gas.

OMV is still receiving Russian gas. Why are you not avoiding that?

Basically, we’re no longer investing in Russia and have value adjusted and deconsolidated the business. Russia is no longer a core region for OMV. OMV is also conducting itself in line with sanctions and laws: gas supplies from Russia are not affected by sanctions, and we comply with laws because our valid gas supply contracts contain take-or-pay commitments that OMV cannot ignore without good reason. In this complex situation, we made great progress in 2023 on diversifying our energy sources.

Which alternative gas sources is OMV using?

We’re taking a multi-pronged approach. On the one hand, OMV is using its own gas production in Norway and Austria plus gas supplies from third-party producers in Norway and Italy. We have also booked additional pipeline capacities, which will give us access to our non-Russian gas sources and the liquid trading markets should the need arise. We have achieved our goal: OMV can provide customers with gas even if Russian gas supplies cease.

A review always includes an element of looking forward. How do you see the future of OMV?

I am optimistic about the next few years. The success of a company depends on its ability to harness sustainability as a driver of innovation and growth. And with its Strategy 2030 and the 20,600 highly skilled employees, OMV is exceptionally well positioned to achieve this.

Many thanks for the talk, Mr. Stern.

Vienna, March 7, 2024

Alfred Stern m.p.