Petrom Project to Unlock Gas Production Potential

Transcription

1 Petrom Project to Unlock Gas Production Potential Bucharest, June 2 nd, 2010 Gabriel Selischi

2 Petrom, the largest oil and gas producer in South-Eastern Europe Petrom has activities in: Exploration & Production Refining & Marketing Gas & Power Petrom Facts and Figures (2009) Turnover: RON 12,842 mn (EUR 3,029 mn) EBITDA: RON 2,950 mn (EUR 696 mn) Investments: RON 4,145 mn (EUR 978 mn) Employees: 27,470 Contribution to State budget RON 6,720 2 OMV-Petrom Project to Unlock Gas Production Potential

3 Shareholders structure In 2004, OMV acquired 51% of Petrom for 1.5 bn Euro Petrom is presently owned by OMV with 51.01% of its shares, Ministry of Economy %, Property Fund SA %, the European Bank for Reconstruction and Development 2.03% and by minority shareholders 6.21%. Property Fund 20.11% EBRD 2.03% Private investors 6.21% Ministry of Economy 20.64% OMV 51.01% 3 OMV-Petrom Project to Unlock Gas Production Potential

4 Exploration and Production Proven oil and gas reserves of Petrom Group of approximately 0.85 billion boe Replacement reserves rate in Romania of 70% (73% at Group level) Crude oil and condensate production in 2009: 4.39 mn tons Gas production in 2009: 5.27 bn cm Exploration on Neptun block in partnership with ExxonMobil New gas processing unit at Midia Production started on Komsomolskoe 4 OMV-Petrom Project to Unlock Gas Production Potential

5 Natural Gas Exploration Potential Remaining Romanian Natural Gas exploration potential is estimated to be some 110 Bm 3 in total Transylvanian Basin contains dry gas, Carpathian basin contains natural gas with often high condensate content Basins Transylvanian Carpathian Probability [Bm3] [Bm3] P P P Mean Source: USGS Bulletin Romania Transylvanian basin (B2204E) USGS Bulletin Romania-Bulgaria (B2204F_508) 5 OMV-Petrom Project to Unlock Gas Production Potential

6 Natural Gas Exploration Potential Expected exploration successes will likely yield smaller gas discoveries Transylvanian and Carpathian basins can be considered mature exploration areas Number of Discoveries Carpathian Transylvanian Bin Size [reserves/discovery in Bm 3 ] (all results <0.15 Bm 3 excluded) 6 OMV-Petrom Project to Unlock Gas Production Potential

7 Exploration Success in Petrom E&P Gas Discoveries Oil Discoveries Suplac Torcesti Lovrin Independenta appraisal Leiculesti Radinesti Coltesti Paraieni Valeni Pauleasca Ochiuri Colibasi Stancesti Oprisenesti Tepes Voda Sinoe appraisal Delta Cobalcescu Sopot,Predesti,Pitulati Mamu 7 OMV-Petrom Project to Unlock Gas Production Potential

8 Natural Gas Production and Consumption Romanian Natural Gas Production provides approx 65% of domestic demand Natural Gas output peaked in 1983 with over 37 Bm 3 Present Natural Gas production levels stable since 2003 at some 11 Bm 3 per year Natural decline compensated through intensive well work-over, reservoir management, installation of compression facilities and exploration successes Production Annual Gas Volumes [Bm 3 ] Consumption Source: BP Statistical Review of World Energy June 2009 Institutul National de Statistica Romania ANRE 8 OMV-Petrom Project to Unlock Gas Production Potential

9 Petrom E&P Gas Production Challenges Exploitation of mature fields Decreasing reservoirs pressure Worn infrastructure Changes in regional gas consumption pattern More stringent EU and international regulations Consequences New gas exploration targets Install compressing capability to enable production of low pressure gas Optimization of gas production and processing infrastructure Increase of gas transportation capability Compliance and energy efficiency measures Gas infrastructure 9 OMV-Petrom Project to Unlock Gas Production Potential

10 Investment in Gas Infrastructure Optimization Petrom presently engages in optimization of the gas production and processing system associated with major gas fields in the SW of Romania, accounting for ca. 40% of its natural gas production The optimization targets consist in: Removal of existing infrastructure bottlenecks Modernization or replacement of worn equipment Production enhancement Assurance of export gas quality Gas infrastructure system Major fields in SW of Romania Optimization target 10 OMV-Petrom Project to Unlock Gas Production Potential

11 Investment in Gas Infrastructure Optimization Integrated assessment of the gas production and processing system: Complex modeling of wells production dynamic and surface facilities system simulation Equipment integrity assessment Process optimization for production enhancement Gas process diagram related to major fields in SW of Romania 11 OMV-Petrom Project to Unlock Gas Production Potential

12 Investment in Natural Gas Development To ensure continued supply of the Romanian gas market, Petrom presently pursues installation of a new gas compressor station near Hurezani Gas Delivery Point This will provide access for SW gas production to the main consumers irrespective of seasonal fluctuations or off take disruptions and resulting high pipeline pressures Hurezani Area 3 Hurezani 4 Bucharest 1 Upstream gas pipelines to secure gas delivery to compressor inlet Turburea 1 2 Ghercesti DOLJCHIM Transgaz pipelines Corbu New production pipelines New metering station DONAWCHEM New compressor Storage Bilciuresti Bucharest ring 2 New compressor station in Hurezani area to increase delivery pressure 3 Pipeline to connect new compressor station with Transgaz delivery point 4 New metering station in Hurezani delivery point 12 OMV-Petrom Project to Unlock Gas Production Potential

13 Hurezani Gas Delivery Project New Bulbuceni compressor station: Three independent centrifugal compressor trains and auxiliary equipment Combined gas output of ca. 4 mn cm/day at 40 bars discharge pressure Start-up of the new facilities scheduled for summer 2010 Compressor house Gas cooler and inlet scrubber Flare Water tank 13 OMV-Petrom Project to Unlock Gas Production Potential

14 Hurezani Gas Delivery Project New Hurezani fiscal metering station: Filter separators, ultrasonic meters, turbines meters, pressure controls, condensate vessel, vent stack New pipelines: New 4 km 20" upstream pipeline New 11.5 km 20" downstream pipeline to transport compressed gas from Bulbuceni compressor station to new Hurezani Metering Station Hurezani metering station Upstream pipeline welding Downstream pipeline tie-in Metering station 14 OMV-Petrom Project to Unlock Gas Production Potential

15 New Technologies - To Be Assessed Mitchell Energy started hydraulic fracturing and producing from wells in the Barnett in Texas in the mid 1980ies Devon Energy, after it acquired Mitchell Energy in 2002 for USD 3.5 bn, started horizontal drilling Up to now some 11,000 well have been drilled producing some 48 bcm/a in the Barnett alone Shale Gas Production in the USA Operations in other shales increased US shale gas production to some 70 bcm/y and is forecasted to reach approximately 250 bcm/y by 2020 Source: WoodMackenzie 15 OMV-Petrom Project to Unlock Gas Production Potential

16 Shale Plays in Europe 16 OMV-Petrom Project to Unlock Gas Production Potential

17 Europe in Need of Unconventional Resources 17 OMV-Petrom Project to Unlock Gas Production Potential

18 Future Development Will Depend On Gas Prices Gas price still regulated by basket pricing mechanism to approximately half of import Gas prices Import price Regulated price The price alignment forecasted would bring internal gas prices to international level The increased gas price might render current and further investment economically efficient Forecast trends 18 OMV-Petrom Project to Unlock Gas Production Potential

19 Thank You!