OMV, the international, integrated oil, gas and chemicals company headquartered in Vienna, Austria, presents its Strategy 2030 today. The firm has set out to transform itself into a sustainable fuels, chemicals, and materials company with a strong focus on circular economy solutions.

 

Based on this new strategy representing the most fundamental strategic shift in the company’s history, OMV aims to become a net-zero emissions company by no later than 2050. The business segment Chemicals & Materials will be the growth engine of the company. It is to be substantially strengthened, expanded, and diversified, with the aim to establish a globally leading position in circular economy solutions. The Refining & Marketing business is to become a leading European provider of sustainable fuels, feedstock, and mobility solutions. In line with the ambition to become a net-zero company, OMV will reduce its oil and gas production by around 20% by 2030 and will completely cease oil and gas production for energy use by 2050. At the same time Exploration & Production business segment will invest in geothermal energy and carbon capture and storage (CCS) leveraging existing assets and capabilities and contribute to a more sustainable society.

 

Alfred Stern, OMV CEO and Chairman of the Executive Board, "If we want to maintain and expand living standards around the world while ensuring the survival of our society, we must move to a more sustainable way of doing business. For this reason, OMV will re-invent essentials for sustainable living."

 

The Chemicals & Materials business will be further strengthened, expanded, and diversified to become the OMV Group’s key growth driver. Driven by Asian markets, global demand for virgin polyolefins is expected to grow above global GDP by 2030. Polyolefins are the largest market segment in the production of plastic goods and remain essential for various industries such as energy, automotive, packaging, construction, and healthcare. A key success factor for sustainable business models in the medium- to long-term is growth in renewable feedstock, bioplastics, and the development of circular solutions. Demand for recycled polyolefins is expected to grow globally about three times faster than virgin polymers until 2030.

 

OMV’s goal is to become a leading global supplier of specialty polyolefin solutions. Important strategic guidelines include expanding the business in attractive markets, particularly in North America and Asia, as well as building sustainable polyolefin production, representing up to 40%of total polyolefin production in Europe. On top of this, the OMV Group intends to take a leading position in the field of renewable and circular economy solutions. Growth is also set to be achieved by diversifying the portfolio towards adjacent products and new product groups.

 

The company can build on a strong position. As a global, backward-integrated polyolefin producer with a base chemical capacity of 7 mn metric tons per year and around 6 mn metric tons of polyolefins, the OMV Group is among the top 10 polyolefin producers worldwide. Extensive innovation capabilities with innovation centers in Austria, Sweden, Finland, and Abu Dhabi, as well as 10,000 successfully filed and granted patents are a strong foundation for future success.

 

OMV intends to achieve integrated growth, both in olefins and polyolefins, building on the strong fundamentals of the chemical market, such as attractive growth rates, exposure to various end-industries and best-in-class returns. A new propane dehydrogenation (PDH) plant coming on stream in Kallo, Belgium, in 2023, will be key to expanding OMV’s monomer position in Europe. Projects such as ReOil will help to replace virgin feedstocks with sustainable ones. In polymers, debottlenecking projects will drive growth in compounding and mechanical recycling. 

 

OMV’s successful partnership with Abu Dhabi based Borouge is the main vehicle for meeting growing customer demand in the Middle East and Asia. With a new ethane cracker producing 1.5 mn metric tons of ethylene and two Borstar plants producing 1.4 mn metric tons of polyethylene per year, Borouge will become the world's largest polyolefin complex at a single site. In North America, expansion will be driven by the Baystar joint venture with TotalEnergies and its respective ethane and polyethylene contributions.

 

Overall, these growth projects will increase sales of monomers by 35% and polyolefins by around 30%.

 

Alfred Stern, “Chemicals & Materials will not only be our growth engine but balance sustainability, risk and returns and strengthen our resilience against market dynamics.”

 

Changing the value chain from a linear to a circular model will be one of the priorities for a sustainable chemicals business going forward. Thanks to its unique integration between chemical recycling, refineries, and petrochemical plants, OMV is engaging in all steps along the value chain. Patented chemical recycling technologies as well as standard and advanced mechanical recycling technologies are expected to support OMV in becoming a global leader in circular economy solutions. 

 

In Refining, OMV strives to become a leading producer of sustainable fuels and chemical feedstock in Europe. Fossil fuel throughput will decline in line with changing demand patterns, while integration with the Chemicals & Materials business segment will be driven forward and deepened.

 

While the market potential for European fossil refineries will decline significantly in terms of both volumes and margins, renewable fuels, and sustainable chemical feedstock will increase. Accordingly, OMV will optimize its integrated refineries in Schwechat and Burghausen to maximize high-quality fossil resources and raise the share of sustainable feedstock. The three European refineries in Austria, Germany, and Romania will continue to be run as one integrated system, optimizing plant utilization, and maximizing margins.

 

Production of sustainable fuels and chemical feedstock will be increased to 1.5 mn metric tons per year by 2030, with sustainable aviation fuels accounting for almost half of the volumes.

 

Martijn van Koten, Member of the Executive Board responsible for Refining, “In Refining, OMV is turning away from fossil feedstock to become a leading, innovative producer of sustainable fuels and chemical feedstock in Europe. This will drive and deepen the integration with our Chemicals & Materials business.”

 

In Marketing, OMV will grow profitability and further develop existing market potential through significant growth in the non-fuel business sector. The retail segment will be resilient but increasingly shift from fuel to e-vehicle charging, hydrogen, and convenience. A portfolio of sustainable premium fuels based on biofuels and synthetic fuels will compensate for the decline in fossil fuels. OMV intends to increase the margin contribution of the retail non-fuel business by around 30% by 2030. 

 

OMV is expanding its capabilities to take advantage of the growth in e-vehicle charging, leveraging its strong retail position in CEE. Investing more than EUR 400 mn by 2030, OMV will offer more than 2,000 e-charging points by 2030 at highway and transit route filling stations, plus around 17,000 office wall-box charging points by 2030.

 

OMV is also aiming to increase sales of Sustainable Aviation Fuel to more than 700,000 metric tons – well beyond the planned regulatory framework – and will target the growing voluntary compliance market. 

 

Elena Skvortsova, Member of the Executive Board responsible for Marketing, “Repositioning our business along market trends and responding to the needs of climate change makes us the partner of choice for our customers – whether with B2B offerings or as the filling station of the future for energy and mobility with an expanded non-fuel convenience segment.”

 

In line with the ongoing energy transition, the Exploration & Production business will support the transformation of the OMV Group as a robust cash generator and focus on further upgrading its competitive asset portfolio. The gradual decline foresees a decrease in crude oil production by around 30% and natural gas production by around 15% by 2030. Investment in the oil and gas production will be continued until 2026, with a focus on developing gas projects, after which it will decrease significantly. The share of gas will increase to more than 60%. The production of oil and gas for energy use will be completely stopped by 2050. As of April 1, 2022, the gas sales and logistics business, excluding OMV Petrom, will be consolidated in E&P to leverage synergies.

 

At the same time, OMV will invest around EUR 5 bn in the development of low-carbon businesses, i. e. geothermal energy and carbon capture and storage (CCS) to reduce its GHG emissions. In geothermal energy, OMV sees its advantage in its extensive subsurface and surface expertise and experience, existing reservoirs and infrastructure, and strong market growth in Europe. Production is expected to reach up to 9 TWh by 2030. OMV is also developing its CCS business to offset absolute emissions and for captive use. The target for 2030 is to grow to 5 mn metric tons a year.

 

OMV will also expand its solar and wind power generation for captive use to at least 1 TWh and explore opportunities in gas and hydrogen storage solutions. In addition to reducing its CO2 footprint, OMV is also working to lower methane emissions. In line with its commitment to the World Bank’s “Zero routine flaring by 2030” initiative, routine flaring and venting of associated gas from oil production will be phased out by 2030. In parallel, methane emissions measurement will be improved, and advanced methane leak detection and repair equipment will be deployed. 

 

Johann Pleininger, Deputy CEO and Member of the Executive Board responsible for Exploration & Production, “Leveraging our E&P assets, capacity, and know-how, we will build and expand the Low Carbon Business. Our overarching goal is to provide cash and sustainable energy solutions to support the transformation.”