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OMV to Spend 10 Billion Euros in Shift Towards Gas, Refining

Reuters, March 13, 2018
Reuters

Austrian energy group OMV is ready to spend 10 billion euros to focus more on gas and value-added refined products and grow its business outside Europe, its CEO said on Tuesday. As other energy companies shift their portfolios towards natural gas as a less polluting alternative to oil, OMV said it too will beef up its gas exploration, refining and transport business, aiming to become one of Europe’s top players in the market.

The partly state-owned group operates refineries in Austria, Germany, and Romania and explores oil and gas fields in central and eastern Europe, the North Sea, the Middle East, and Africa. Half of the acquisition budget will be used to expand its refining business by investing in markets outside Europe, where it currently generates the lion’s share of its sales.

We are going to diversify it towards the growing markets, especially as we speak about downstream,” Chief Executive Rainer Seele said at a presentation in London.

OMV said it will use part of the war chest to develop an upstream - or exploration and production - business in Australia and New Zealand. The Vienna-based group aims to achieve clean current cost of supplies (CCS) earnings before interest and tax, which exclude special items and inventory gains or losses, of more than 5 billion euros ($6.16 billion) by 2025, an increase of 70 percent to last year. OMV said it targets a 10 percent share of the German gas market by 2025 from 2.5 percent at present and plans to feed additional gas from Norway and Romania into the European grid to increase sales to more than 20 billion cubic meters by 2025.

OMV is among five Western companies to have invested in Russian gas export pipeline Nord Stream 2, which the latest U.S. sanctions related to Russia’s activities in Crimea and European Union opposition may make harder to realise. It operates natural gas transmission pipelines in Austria, holds interests in the Central European Gas Hub, and operates gas-fired power plants in Romania and Turkey. ($1 = 0.8111 euros)


(Reporting by Kirsti Knolle; Editing by Maria Sheahan and Louise Heavens)

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