Slide 1: OMV Petrom results Jan – Dec and Q4/15
OMV Petrom results Jan – Dec and Q4/15 February 18, 2016
Slide 2: Business environment and operational highlights
Business environment and operational highlights Mariana Gheorghe, CEO
Slide 3: High safety and efficiency focus
OMV Petrom High safety and efficiency focus LTIR1 Romania Operational safety – our top priority LTIR substantially improved 1.6 2015: the lowest level since privatization Lower than IOGP2 international benchmark > 60% reduction 0.8 Significant reduction of GHG3 emission 0.48 0.49 intensity, ~15% les
Slide 4: Business environment in 2015
Business environment in 2015 International environment Romania: good macroeconomics Oil price: - 47% yoy 2015 GDP growth: +3.7%2 Oil demand and supply in Europe: CPI annual inflation:12-month avg. -1% demand +2% yoy, supply +5% yoy1 (end-Dec 2015) European gas demand: approx. +5% Budget balance: an
Slide 5: Dynamics of the Romanian energy sector in 2015
Dynamics of the Romanian energy sector in 2015 ► Demand1 ► Fuels2 +5%; Gas -5%; Power +2%3 Demand and prices ► Prices ► Urals: -47% 2015 vs 2014 ► Gas: HH4 +8%, deregulation continued; NHH5 liberalized ► Power6: +5% ► Downstream Gas ► Mandatory gas trading on centralized platforms ► Abolished import
Slide 6: 2015: Resilient in highly volatile market
OMV Petrom 2015: Resilient in highly volatile market Safe operations: Record low LTIR, below international benchmark Good operational performance ► Hydrocarbon production broadly stable ► Neptun Deep exploration successfully completed1 ► High refinery utilization rate, increased retail sales volumes
Slide 7: Our integrated business model supports financial results
OMV Petrom Our integrated business model supports financial results Clean CCS EBIT, RON mn Group cash flow from operations, RON mn -52% -23% 5,202 6,830 5,283 4,667 2,522 919 1,315 654 (63) (145) (56) 434 2014 2015 2014 2015 Upstream Downstream Oil Downstream Gas Co&O and Cons. 6 | OMV Petrom result
Slide 8: Financial highlights and priorities
OMV Petrom Financial highlights and priorities Andreas Matje, CFO
Slide 9: Economic environment
Economic environment Oil price (USD/bbl) and FX (USD/RON) Indicator refining margin (USD/bbl) 90 4.5 10 76 4.07 7.75 5.90 4.0 60 5 3.55 42 3.5 30 3.0 0 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Avg Urals price (left scale) Avg USD/RON (right scale) Gas prices (EUR/MWh)1 Power price
Slide 10: Q4/15 overview
Q4/15 overview Clean CCS EBIT, RON mn Q4/15 vs Q4/14 -79% 1,026 Average Urals crude prices down 44% to USD 42.26/bbl RON weaker vs USD by 15% 532 Group production at 176 kboe/d 211 Higher exploration expenses 230 277 Higher indicator refining margin 18 245 165 Lower gas sales volumes (223) Lower tax
Slide 11: Revised market outlook triggered significant impairments in Upstream in 2015
Revised market outlook triggered significant impairments in Upstream in 2015 OMV Petrom oil price assumptions, USD/bbl Impairments in Upstream in 2015, RON mn 2nd Revision (Q4/15) Original planning assumption (2014) ~2,700 1st Revision (Q3/15) 110 105 105 105 100 90 90 85 85 Q4/15 80 80 75 75 70 70
Slide 12: Special items and CCS effect
Special items and CCS effect Q4/15 (RON mn) RON mn Q4/15 Q4/14 Clean CCS EBIT 211 1,026 211 CCS gains/ (losses) (125) (156) (125) (8) Clean EBIT 85 870 Personnel related costs (8) (27) Other impairments (1,997) (917) (1,997) Other 74 (38) Total special items (1,930) (981) Reported EBIT (1,844) (111)
Slide 13: Clean CCS net income
Clean CCS net income Clean CCS net income attribu- RON mn Q4/15 Q4/14 ∆ table to stockholders (RON mn) EBIT (1,844) (111) n.m. Financial result (135) (167) (19)% -90% 668 Taxes 299 (30) n.m. Effective tax rate 15% (11)% n.m. Net income/(loss) (1,680) (307) 447% Minorities (5.80) (3.00) 93% Net incom
Slide 14: Cash flow
Cash flow 2015 (RON mn) in RON mn 2015 2014 ∆ Profit/(loss) before taxation (726) 2,909 n.m. Depreciation, amortization and 6,761 4,806 41% 146 (729) impairments Net interest paid (104) (61) 70% Tax on profit paid (729) (927) (21)% Other (66) 422 n.m. (4,953) Sources of funds 5,137 7,150 (28)% 6,761
Slide 15: CAPEX and EBITD
CAPEX and EBITD 2015 (RON mn) Key investment projects 6,231 Upstream: Field redevelopment executions, workover activities, drilling as well as investments related to Neptun Deep project 3,895 4,099 Downstream Oil: 3+3 terminals strategy, 3,486 efficiency, legal and environmental projects 1,841 7 393
Slide 16: Upstream – Clean EBIT
Upstream – Clean EBIT Q4/15 vs Q3/15 (RON mn) Q4/15 vs Q4/14 (RON mn) 532 416 47 (254) (229) (760) (204) (42) (223) (223) (320) 366 Q3/15 Realization Volume Exploration Other Q4/15 expenses Q4/14 Realization Volume Exploration Other Q4/15 expenses ► Lower realized oil price ► Realized oil price down
Slide 17: Downstream – Clean CCS EBIT
Downstream – Clean CCS EBIT Q4/15 vs Q4/14 (RON mn) 269 248 (26) 47 Q4/14 Downstream Oil Downstream Gas Q4/15 Downstream Oil: higher refining margins and increased volumes across all sales channels Downstream Gas: lower result vs Q4/14, which was positively influenced by RON 30 mn reversal of provis
Slide 18: Efficiency and optimization programs in place, with significant results achieved
2015: Efficiency and optimization programs in place, with significant results achieved 2015 vs 2014 Upstream Production Reduced by USD 4.1/boe, from - 24 % Costs (USD/boe) USD 17.3/boe to USD 13.2/boe1 Downstream Direct Reduced consultancy, training and travel Cash Costs costs, energy efficiency imp
Slide 19: 2016: Financial priorities
2016: Financial priorities Cash flow Strive for neutral free cash flow1 in 2016 Good management of working capital; tight cost control No dividends to be distributed for 2015 financial year2 Investments Group CAPEX: EUR 0.7-0.8 bn, ~85% in Upstream Prioritize projects based on cash flow contribution
Slide 20: OMV Petrom Upstream
OMV Petrom Upstream Gabriel Selischi EB member
Slide 21: Upstream Key indicators for 2015
Upstream Key indicators for 2015 ~24% Production cost1 reduction vs 2014 Production very close to the level of 2014 ~35% CAPEX (incl. E&A2) reduction vs 2014 7* Deep offshore wells in the Neptun Block 35% Three year average RRR3 delivered by projects 1 in USD/boe; 2 exploration and appraisal capital
Slide 22: Reduced OMV Petrom Group OPEX to a new level
Upstream Reduced OMV Petrom Group OPEX to a new level Production costs, USD/boe 2015 OPEX reduced by 24% vs 2014: ► Favorable FX effects ► Shutdown of uneconomic wells ► Improved running time of pumping units ► Resizing of the workover rig fleet 16.7 17.3 ► Renegotiations of contracts 16.2 15.4 15.5
Slide 23: Clear focus on operational improvements
Upstream Clear focus on operational improvements Mean Time between Failure (MTBF), days Production losses, kboe/d 500 20 OeX1 1 15 263 -10% Pump optimization 10 19 16 16 148 14 13 12 Well modernization 5 36 Do nothing 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014
Slide 24: Production largely maintained due to past investments and discoveries
Upstream Production largely maintained due to past investments and discoveries Production in Romania, kboe/d ► 2015 production relatively stable: ► FRDs (incl. Totea) contribution to up to -4%1 production increased by 60% vs 2014 174 174 170 171 171 170 ► Workovers in 2015 ~7% higher contribution to
Slide 25: Transforming additional reserves into production
Upstream Transforming additional reserves into production 1P Reserves and additions/year, boe mn Production from FRD investments1, kboe/d 1,000 300 30 805 786 750 707 671 625 20 500 150 10 0 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 1P reserves Reserves from Revisions, Extensio
Slide 26: FRD Lebada East project to start production in 2016
Upstream FRD Lebada East project to start production in 2016 ► Final Investment Decision of EUR ~60 mn made in 2014 ► Optimize exploitation by upgrading existing non-associated (NAG) gas compression system ► First execution stage completed in Q4 2015 (1st total offshore shut down) ► Second execution
Slide 27: CAPEX adjusted to the low oil price environment
Upstream CAPEX adjusted to the low oil price environment Upstream CAPEX, EUR mn ► 2015 CAPEX reduced by ~35% yoy: ► Prioritize investments 1,204 ► E&A offshore maintained, lower onshore ► 2016: Flexibility to reduce further 784 ► Planning in a range of scenarios ► Leverage our investment portfolio m
Slide 28: Neptun Block: drilling program successfully completed
Upstream Neptun Block: drilling program successfully completed Neptun Deep ► JV established in 2008: OMV Petrom (50%), ExxonMobil (50%,Operator) ► Total investment in excess of USD 1.5 bn since 2008 (thereof 50% OMV Petrom) ► First exploration drilling campaign in 2011 – 2012 ► Domino-1 well gas dis
Slide 29: Upstream: Outlook 2016
Upstream: Outlook 2016 Further adapt to the new oil price environment ► No compromise on safety HSSE ► Focus on behavioral change Value driven ► Further pursue positive cash flow management ► Continue portfolio optimization ► Simplicity and standardization ► Adjustment to continue Operational ► Stri
Slide 30: OMV Petrom Downstream Oil
OMV Petrom Downstream Oil Neil Morgan EB member
Slide 31: Market Environment in 2015 Main highlights
Market Environment in 2015 Main highlights Our operating region1 Romania Strong refining margins throughout Increased oil product demand vs 2014 2015, however on downward trend in Strong market competition Q4/15 Long on both diesel and gasoline Higher oil product demand vs 2014 Higher crude oil impo
Slide 32: Contribution to Group results proves the benefits of integration
Downstream Oil Contribution to Group results proves the benefits of integration Significantly improved Downstream Oil result in Downstream Oil share of OMV Petrom the current low oil price environment Group’s Clean CCS EBIT Clean CCS EBIT, RON mn 1,500 1,315 ~6% 1,000 ~52% 654 500 374 31 0 Average 2
Slide 33: Capitalizing on the refinery modernization benefits
Downstream Oil Capitalizing on the refinery modernization benefits USD/bbl % 15 15 12.7 Indicator refining margin1 significantly 10 9.1 10 improved 8.7 Utilization rate stood at 88% 5 5 0.3 1.9 Sustainable energy efficiency improvements 0 0 (2.4) (1.4) (2.8) Improvement in safety performance -5 -5 2
Slide 34: Downstream Oil Sales performance
Downstream Oil Sales performance Non-oil products contribution to retail Market position in Romania1 margin 13% 19% Retail #1 Wholesale #2 OMV Petrom Group Average CEE2 Aviation #1 Oil products Non-Oil Products 2015 vs 2014 Group total refined product sales, kt Group total refined product sales incr
Slide 35: Downstream Oil Outlook 2016
Downstream Oil Outlook 2016 Market environment OMV Petrom Refining margins expected to come Petrobrazi refinery: one-month planned down from 2015 highs shutdown and turnaround in Q2/16 Pressure on fuel margins in the Adjusted refinery utilization rate1 targeted competitive market to remain high Dema
Slide 36: OMV Petrom Downstream Gas
OMV Petrom Downstream Gas Lacramioara Diaconu-Pintea EB member
Slide 37: Gas and power markets in 2015
Gas and power markets in 2015 RO: Decreasing gas demand, higher pressure on prices EU gas demand and production1,TWh RO Gas demand, TWh RO Power production, TWh CEGH price, EUR/MWh 133 128 121 63.6 64.6 5,279 5,107 20 58.6 6.4 8.4 4,861 10 1 4.7 6.8 6.8 1.2 7.0 27 2.6 2.7 11.7 11.6 11.6 22 112 118 1
Slide 38: Downstream Gas performance in 2015
Downstream Gas performance in 2015 Good operational results in a weak market environment Gas sales, TWh Net electrical output, TWh 52.7 51.4 2.9 47.7 2.7 6.5 6.1 3.4 1.3 46.2 44.3 45.2 2013 2014 2015 2013 2014 2015 Internal sales Sales to third parties Gas Power ► Sales volumes: +8% yoy ► Brazi powe
Slide 39: Outlook 2016 OMV Petrom – focus on value creation
Outlook 2016 OMV Petrom – focus on value creation Romania OMV Petrom ► Gas demand broadly flat ► Maintain leading position in the free gas ► Gas price expected to be impacted by market, with strong customer orientation competitive imports ► Brazi power plant: competitive sales ► Power demand stable
Slide 40: Management agenda for 2016
Management agenda for 2016 Mariana Gheorghe, CEO
Slide 41: Management agenda for 2016
Management agenda for 2016 ► Capitalize on existing foundation to deliver on strategic objectives, although impacted by adjustment to market downturn ► Focus on sustainable performance, profitability and optimization of assets portfolio ► Neptun Deep: encouraging results to further assess commercial
Slide 42: Legal Disclaimer
Legal Disclaimer This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, constituting or forming part of, any actual offer to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares issued by the Company or any
Slide 43: Contact Investor Relations
Contact Investor Relations OMV Petrom Investor Relations 2016 Financial Calendar Tel.: +40 372 088406 April 26: AGM & Annual Report 2015 E-mail: investor.relations.petrom@petrom.com May 11: Q1 2016 results Homepage: www.omvpetrom.com August 10: Q2 & HY 2016 results November 9: Q3 2016 results