Der internationale Energiemarkt Eine Bestandsaufnahme Mag. Christoph Lewisch OMV Corporate Strategy / Energy Market Economics Wien, 30. November 2017 OMV Aktiengesellschaft
Oil as yesterday s fuel? Source: Economist 2014 2
Questionable Myths and Prophecies about Oil Industry 1972 1988 1998 2007 2008 2013 2014 Oil will running out in 2000 OPEC s market dominance will steadily increase Oil industry belongs to the old economy Peak oil is coming soon or even behind us Oil price will go beyond USD 200 Oil is heavily subsidized Unconventional oil bubble will burst shortly 3
IEA World Energy Outlook 2017 New Policies scenario confirms flattening oil demand growth until 2040 Global Oil demand In mb/d Change in Global Oil demand 2016-2040 In mb/d Global oil demand growth flattening out, peak expected to be post 2030 Demand increasingly focused on Transport & Petchem Feedstocks Source: IEA, New Policies Scenario 2017 4
Increasingly stringent emission targets are set with Europe being the frontrunner in terms of carbon regulations and bio fuels quota Global Long term - 2050 European Short / Medium term regulation 2020 / 2030 National & Local Short / Medium term 2020 / 2030 EU ETS (incl. aviation) EU Energy Roadmap 2050 80-95% decarbonization of economy 60% decarbonization of transport Non-ETS (Effort Sharing Decision) National Emission Ceiling Directive* Renewable Energy Directive Indirect Land-use Change Directive Fuels Quality Directive EU Sulphur in Liquids Directive Energy Efficiency Directive Maximum CO 2 emissions from new cars Diesel bans (e.g. London, Paris, Madrid, etc.) E-mobility subsidies Restrictions / bans for heating oil (and natural gas) / subsidies for fuel switch Building regulations / restrictions (efficiency, insulation, etc.) 5 * Final / enforced for 2030 All others are as draft / under discussion
Mainly regulatory trends are influencing European downstream oil demand patterns Electrification of all economic sectors Regulatory Trends Expected Trends Increased mobility & travelling Stop ICE new car sales Electrified mobility surge in WE SOx & NOx limits Alternative Fuels Heating Oil bans Changing Lifestyle Regulations on CO2, EE, RES IMO sulfur regulation 0.5% Banning Diesel 2030+ 2025 Efficiency in ICE & fleet renewals 2020 DS Oil Trends Europe Decoupling industry growth & energy demand Electrification OEMs 6
The political momentum will focus on transport as all other sectors have managed to reduce emissions significantly EU GHG Emissions 2016 4.277 Gt CO2e* EU-28 GHG-Emission 1990-2016: -1.377 Gt CO2e (-24%) 15% 10% 3% 30% Waste Agriculture Residential / comm. -206-108 -72-45% -32% -10% Transport +18% 143 22% Energy supply Transport Agriculture 20% Industry Residential / comm. Waste Industry -505-37% Energy supply -594-32% -700-500 -300-100 100 300 mn t CO2e Source: European Environment Agency 11/2017 *) excl. international bunkers (144 mt aviation & ~135 mt shipping) 7
In November 2017 EU suggested a new regulation for Passenger cars and small vans until 2030 - Clean Mobility Package New CO2 standards for cars and vans 2021-2030 Average emissions of the EU fleet of new cars and new vans in 2030 will have to be 30% lower than in 2021 (-15 % for 2025) Starting from 2021, the emission targets will be based on the new emissions test procedure the Worldwide Harmonized Light Vehicle Test Procedure (WLTP), which was introduced in Sep 2017. As the WLTP test procedure will be phased in over the next years, the newly proposed 2025 and 2030 fleet wide targets are not defined as absolute values (in g CO2/km), but expressed as percentage reductions compared to the average of the specific emission targets for 2021. Passenger cars (in g CO2/km): 2021 2025 2030 95.0 80.8 66.5 Further measures: The action plan on infrastructure for alternative fuels and in future new regulation for freight sector expected 8
Market sentiment shows E-MOBILITY on the hype, however environmental footprint from power generation crucial BEVs carbon emissions from power generation*) (in g/km) 152 119 107 100 70 72 70 70 49 30 28 44 65g 50g 1990 2015 2030 Germany Austria EU CCGT 50g 65g *) assuming 20 KWh/ 100 km real world consumption, without losses. Sources: WEO 2016 NPS, Umweltbundesamt (Deutschland), Umwelt und Prognose Institut (UPI) Germany 2030 influenced by phase out ~80 TWh nuclear capacity 9
Penetration speed of EV depends on drivers and challenges Drivers Obstacles Battery Production Capacity LiOn demand expected to increase to 1,300 GWh Resource limitation Lithium resources concentrated in few countries Possibilities for trucks restricted (reach, load) however Tesla concept truck presented Long holding periods for cars especially CEE Public grid capacity investments required Battery recycling only at pilot level Support schemes slowly decreasing trend of subsidies CO2 Life Cycle Assessment 10
Long-term European oil demand indicates a market decrease of 50 100 mtoe until 2030 European Oil product demand in Mtoe 1 550 500 450 400 350 300 250 200 Andere Straßenverkehr Gütertransport European oil demand increase in the last years due to price elasticity and solid economic growth Efficiency gains and substitution by alternative fuels trigger decline in road transportation sector 150 100 Straßenverkehr Pers. transport 50 Naphtha Jet 0 2015 2020 2025 2030 Scenario range IEA New Policies Jet and Naphtha with solid slow growth path 1 Nachfragetrend basierend auf EU 28 (2015: 516 mtoe - WEO 2017 Schätzung für 2016) 11
Efficiency gains in combination with hybrid solutions will be the main threat for demand decline until 2030 Fuel demand trend for road transportation in EU-28 indexed (on basis 2015 =100) 100 Freight Efficiency gains (also triggered by hybrid solutions) in passenger and freight sector Role of alternative fuel (e.g. BEV) expected to remain limited in total fleet 7-9 Jahre Auto Haltedauer Passenger cars ~75 bis zu 20 Jahre Auto Lebenszyklus ACT 2015 Passenger car km growth Passenger car efficiency & vehicle substitution EV / Hybrid Passenger cars others Growth in freight tonnes Efficiency gains freight transport FC 2030 30% Neuwagenverkauf 2030 11% Flottenanteil 2030 Source: OMV / JBC 12
The next decade will be challenging for the European Downstream industry Reducing Demand European Downstream challenges Bio blending targets Overcapacity & import pressure Changing product mix Stricter regulations Suppressed & volatile margins Further refinery closures to be expected 13
Mid-term outlook for European downstream oil environment remains challenging Declining volumes and growing import volumes Further refinery closures required however currently favorable environment OMV refineries with strong upstream and petrochemical integration are well positioned in this environment 14
OMV is actively involved in various alternative energies E-mobility 40% interest in SMATRICS, Austria s leading e-mobility provider On the road charging at ~25 OMV stations in AT, DE, SI, RO and HU Cooperation with numerous e-mobility players (e.g. Tesla, Elektrica) Strategic partnership with IONITY (fastcharging facilities at OMV stations in Centraland Eastern Europe) Natural gas (CNG/LNG) CNG: 56 own filling stations, over 10 years experience, fleet filling stations LNG: Regasification terminal GATE, bulk sales in Turkey Further initiatives under evaluation H2 Mobility 8 hydrogen filling stations in Austria and Germany, further openings in 2017 JV partner in H2 mobility initiative: targets ~400 H2 filling stations in Germany by 2023 Others ReOil converting used plastics into synthetic crude oil: a pilot plant will go into operation at the beginning of 2018 Mobility Services (e.g. ROUTEX) 15
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