WOOD Flash – OMV: strategy update – net zero by 2050
OMV held a capital markets day yesterday (16 March), to discuss its updated strategy with investors. Management has set out a target of reaching net zero by 2050, and a roadmap to achieve that. More detailed plans were shared on its operational, financial and environmental targets for 2030. The new strategy makes the exploration and production business the cash cow, which will deliver the cash flow necessary for company transformation, with no new exploration projects after 2026E. Refining and marketing will focus investments on increasing the use of more sustainable feedstocks, and crude processing will decline by 2.6 mtpa by 2030E. Chemicals and materials will grow from about 30% of EBIT to 50% in 2030E. 40% of capex is to be in new businesses, including hydrogen, carbon capture and geothermal energy. This will enable a 20% decline in total emissions by 2030E, 40% by 2040E and net zero by 2050E. Throughout the period, management promises to adhere to its progressive dividend policy. We believe that the strategy is well-balanced, which addresses the problem of emissions successfully, while levering OMV’s competencies and generating a reasonable return on investments.OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
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