CONTENT I. EXECUTIVE SUMMARY II. UPSTREAM OPERATION III. DOWNSTREAM OPERATION IV. FINANCIALS V. APPENDIX KEY UPSTREAM PROJECTS 2
I. EXECUTIVE SUMMARY 3
KEY GOALS AND MESSAGES CURRENT PORTFOLIO* TO DELIVER 125 135 MBOEPD W. IMPROVING UNIT EBITDA UPSTREAM OVER USD 1BN CAPEX SPENDING P.A. TO DERISK AND DEVELOP 1.5 BBOE TOTAL RESERVE AND RESOURCE POTENTIALS ACTIVE M&A TO STEP INTO A…
UPSTREAM-DRIVEN, INTEGRATED COMPANY REGION EBITDA 2013 DATA 2013 GROWTH DRIVERS & COMPETITIVE ADVANTAGE 576 MMboe SPE 2P reserves1 Around 10% production increase by 2015 UPSTREAM 960 MMboe Recoverable Organic production may…
ORGANIC* PRODUCTION MAY INCREASE BY 30% IN 5 YEARS with major contributions from Middle East and North Sea areas with high unit EBITDA PRODUCTION OUTLOOK* (RISKED, BY 2015 AROUND 10% ENTITLEMENT BASED) PRODUCTION GROWTH* 140 30%…
ACTIVE M&A TO STEP INTO A NEW LEAGUE Focusing on value creation over volume growth NORTH SEA Enhance shallow offshore experience and create a new hub Decreasing average political risk KEY PRINCIPLES AND GOALS profile of MOL Groups…
KURDISTAN R.I.: ACCELERATED DEVELOPMENT TO ENHANCE CASH GENERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel by H2 KURDISTAN REGION OF IRAQ Three discoveries (Bijell, Bakrman, Shaikan) Accelerated…
FIRST VISIBLE BARRELS STABILIZE GROUP PRODUCTION LEVEL Unit profitability of export will be above group level due to PSC Shaikan: Export quality production with 20- 40 mboepd capacity in 2014 Bijell EWT to deliver first barrels in…
NORTH SEA: A STRATEGIC STEP TO CREATE NEW HUB Entering an attractive new region with stability and economic incentives STRATEGIC CONSIDERATIONS 1st strategic step to enhance offshore experience and create a new hub Shifting average…
SIZEABLE SHORT/MID-TERM PRODUCTION WITH ABOVE AVG UNIT PROFITABILITY Project has 10% IRR with expected peak production of 16-18 mboepd in 2018-2019 NORTH SEA (28 MMboe*) OVERVIEW OF MAIN PRODUCING ASSETS Majority of asset portfolio…
MOL DELIVERS TOP QUARTILE PERFORMANCE IN TOUGH ENVIRONMENT However, still significant gap to pre-crisis level profitability, less efficient units below break even REFINERY MARGIN (URAL-MED, USD/BBL) CLEAN CCS-BASED DS EBITDA ( MN USD)…
USD 400MN EFFICIENCY IMPROVEMENT WAS DELIVERED BY 2013 USD 100mn is still due in 2014 NDSP BREAKDOWN BY YEARS (MN USD) NDSP BREAKDOWN BY CATEGORIES (%) 600 USD 500-550mn SCM-driven 500 8% improvement Revenue increase 19% Sales…
CONTINUOUSLY STRENGTHENING FINANCIAL POSITION Indebtedness indicators at a 5-year low NET DEBT TO EBITDA (X) GEARING (%) 3,5 50 Limit of net debt to EBITDA 45 3 40 36 2,5 35 33 31 1,96 30 28 2 1,72 25 1,66 1,44 1,38 25 1,5…
USD 1.6-1.9BN CAPEX PLANNED FOR 2014 WITH UPSTREAM FOCUS Downstream spendings to peak in 2014-15 due to ongoing growth projects Downstream Strict control on sustain CAPEX Upstream Selective profitable growth Balance between early…
MANAGEMENT HAS PROVEN TRACK RECORD IN TRANSFORMATION Continuity and experience are top priorities Stable, proved executive management team difficult portfolio and cost management decisions (Gas business, CAPEX cuts in 2009)…
MANAGEMENT INCENTIVE PROGRAMS On the top level around 70% of the compensation is variable Annual target setting and evaluation based on corporate, organizational and individual SHORT TERM INCENTIVES targets to focus managerial…
II. UPSTREAM OPERATION 18
UPSTREAM: SPEED UP ORGANIC DEVELOPMENTS AND RENEW THE ASSET BASE CURRENT PORTFOLIO* TO DELIVER AROUND 125-135 MBOEPD AT PEAK WITH IMPROVING UNIT EBITDA ABOVE 100% RESERVE REPLACEMENT RATIO IS TARGETED ON 3 YEARS AVERAGE ACTIVE M&A…
PRODUCTION ACTIVITIES IN 7 COUNTRIES Provide a good basis for the next years Production*, 2013 : CEE total 97 mboepd Russia Croatia, Hungary Reserves: 576 MMboe Reserves: 130 MMboe Reserves: 348 MMboe Production*: 7 mboepd Production:…
960 MMBOE* EXPLORATION POTENTIAL OF CURRENT ASSETS to secure organic mid-term growth CEE onshore & offshore Russia 140 150 Matjushkinsky, Baitugan**, Hungary, Croatia, Yerilkinskiy** Romania Kazakhstan 135 Fedorovskoye, North…
ORGANIC* PRODUCTION MAY INCREASE BY 30% IN 5 YEARS with major contributions from Middle East and North Sea areas with high unit EBITDA PRODUCTION OUTLOOK* (RISKED, BY 2015 AROUND 10% ENTITLEMENT BASED) PRODUCTION GROWTH* 140 30%…
OVER USD 1BN ORGANIC CAPEX SPENDING TARGETED P.A. to derisk and develop 1.5 BBoe total reserve and resource potentials GEOGRAPHICAL BREAKDOWN OF CAPEX SPENDING KEY INTERNATIONAL PROJECTS OF THE COMING YEARS Unrisked RRP Working…
KURDISTAN R.I.: ACCELERATED DEVELOPMENT TO ENHANCE CASH GENERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel by H2 KURDISTAN REGION OF IRAQ Three discoveries (Bijell, Bakrman, Shaikan) Accelerated…
FIRST VISIBLE BARRELS STABILIZE GROUP PRODUCTION LEVEL Unit profitability of export will be above group level due to PSC Shaikan: Export quality production with 20- 40 mboepd capacity in 2014 Bijell EWT to deliver first barrels in…
NORTH SEA: A STRATEGIC STEP TO CREATE NEW HUB Entering an attractive new region with stability and economic incentives STRATEGIC CONSIDERATIONS 1st strategic step to enhance offshore experience and create a new hub Shifting average…
SIZEABLE SHORT/MID-TERM PRODUCTION WITH ABOVE AVG UNIT PROFITABILITY Project has 10% IRR with expected peak production of 16-18 mboepd in 2018-2019 NORTH SEA (28 MMboe*) OVERVIEW OF MAIN PRODUCING ASSETS Majority of asset portfolio…
CEE: MINIMALIZE DECLINE RATE TO LOW SINGLE DIGIT LEVEL Croatia: Back to production growth by 2015 HUNGARY+CROATIA (349 MMboe*) - PRODUCTION OUTLOOK 80 POS Unique know-how and infrastructure high 60 Several ongoing development…
HUNGARY: MITIGATE THE DECLINE TO 5% FROM EXISTING FIELDS Along with several efficiency improvement measures to maximize cash-flow HUNGARY (140 MMboe) 75 years E&P experience with more than 40 years EOR/EGR technological knowledge…
KAZAKHSTAN: ENTERING FIELD DEVELOPMENT PHASE IN 2014 Start of early production is expected in 2H 2016 KAZAKHSTAN (37 MMboe) FED: Significant discoveries on a 200 MMboe* reserve field in operatorship position To enter in…
RUSSIA: STILL A CORE COUNTRY AMID PORTFOLIO RESTRUCTURING Intensive work program continues on existing fields RUSSIA (130 MMboe*) Portfolio amidst restructuring after monetizing ZMB field and ongoing sale of 49% in Baitugan and…
PAKISTAN: INCREASING PROFITABILITY BY IMPROVING LIQUID TO GAS RATIO More focus on condensate rich exploration blocks with higher interests PAKISTAN (18 MMboe) 15 years of operatorship experience on 100 mboepd potential (100%) TAL…
ACTIVE M&A TO STEP INTO A NEW LEAGUE Focusing on value creation over volume growth NORTH SEA Enhance shallow offshore experience and create a new hub Decreasing average political risk KEY PRINCIPLES AND GOALS profile of MOL Groups…
III. DOWNSTREAM OPERATION 34
DOWNSTREAM REMAINS A CORE PILLAR OF THE GROUP WITH IMPROVING CONTRIBUTION TWO LARGEST ASSETS AMONG THE MOST COMPLEX AND PROFITABLE IN EUROPE PROFITABILITY INCREASED IN 2013 IN A MUCH WORSE ENVIRONMENT USD 400MN EFFICIENCY…
TWO LARGEST ASSETS AMONG THE BESTS IN EUROPE Integrated operation in adjacent markets KEY STRENGTH Complex, diesel geared refineries Integrated petrochemical units to handle surplus gasoline/naphtha pool Bratislava Strong…
MOL DELIVERS TOP QUARTILE PERFORMANCE IN TOUGH ENVIRONMENT However, still significant gap to pre-crisis level profitability, less efficient units below break even REFINERY MARGIN (URAL-MED, USD/BBL) CLEAN CCS-BASED DS EBITDA (MN USD)…
USD 400MN EFFICIENCY IMPROVEMENT WAS DELIVERED BY 2013 USD 100mn is still due in 2014 NDSP BREAKDOWN BY YEARS (MN USD) NDSP BREAKDOWN BY CATEGORIES (%) 600 500-550 mn USD SCM-driven 500 8% improvement Revenue increase 19%…
2013: IMPROVED PERFORMANCE DESPITE WORSENING CONDITIONS A clear evidence to the success of our efficiency improvement program NDSP DELIVERY 2012 VS 2013 (MN USD) +15 -235 +250 670 Brent-Ural spread: -0.4 USD /bbl 700 Gasoline…
CONTINUATION OF MODEST DEMAND INCREASE IS EXPECTED IN 2014 as the regional economic recovery continues REGIONAL MOTOR FUEL DEMAND (YOY CHANGE %) GDP AND MOTOR FUEL GROWTH (2014E, YOY CHANGE %) 6% 2,5% 2.0 3.9 2.0 3% Market (mn kt) 0%…
DOWNSTREAM INTEGRATION FOR CAPTIVE MARKET EXTENSION could be supported by inorganic retail growth CHANGE OF RETAIL OUTLET SIZE (%, 2013 VS 2010) PETCHEM INVESTMENTS Butadiene 400%< 130 ktpa unit is under construction to off-take…
IV. FINANCIAL OVERVIEW 42
STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: CAPEX SHOULD BE FINANCED FROM OPERATING CASH FLOW 16% NET GEARING & 0.8 NET DEBT TO EBITDA RATIO ARE AT A 5-YEAR LOW USD 1.6-1.9BN CAPEX (2014) WITH UPSTREAM…
CONSERVATIVE FINANCIAL POLICY CAPEX should be financed from operating cash flow OPERATING CASH-FLOW VS CAPEX (MN USD) 4 000 3 500 3 000 INA 2 500 2 000 Pearl 1 500 1 000 Financials 500 0 2008 2009 2010 2011…
CONTINUOUSLY STRENGTHENING FINANCIAL POSITION Indebtedness indicators at a 5-year low NET DEBT TO EBITDA (X) GEARING (%) 3,5 50 Limit of net debt to EBITDA 45 3 40 36 2,5 35 33 31 1,96 30 28 2 1,72 25 1,66 1,44 1,38 25 1,5…
USD 1.6-1.9BN CAPEX PLANNED FOR 2014 WITH UPSTREAM FOCUS Downstream spendings to peak in 2014-15 due to ongoing growth projects Downstream Strict control on sustain CAPEX Upstream Selective profitable growth Balance between early…
CONSIDERABLE AVAILABLE LIQUIDITY EUR 4.4bn total available liquidity DRAWN VERSUS UNDRAWN FACILITIES (EUR MILLION) TOTAL AVAILABLE LIQUIDITY (EUR MILLION) 7 000 Existing mid- and long term facilities as of 31 Dec 2013 6 000 788…
FROM DIVERSIFIED FUNDING SOURCES Further steps made towards diversification in 2013 RECENT EVENTS MID- AND LONG-TERM COMMITTED FUNDING PORTFOLIO EUR 200mn Revolving Credit Facility concluded for Slovnaft December 2013 EUR 45mn…
CREDIT RATING ABOVE SOVEREIGN RATING AT FITCH, IN LINE WITH THAT AT S&P FFO/NET DEBT* HISTORICAL FOREIGN LONG TERM RATINGS 50,00% MOL S&P Hungary S&P MOL Fitch Hungary Fitch 45,00% 40,00% 35,00% 30,00% 25,00% 20,00% 15,00% 10,00%…
KEY ITEMS OF TAXATION Positive effect vs. 2012 level HUNGARY Revenue based Crisis tax abolished from 2013 HUF 30bn negative effect p.a. in 2010-12 Profit based Robin Hood nominal tax rate is 31% only energy related part of the profit…
SHAREHOLDER STRUCTURE As of 31 December 2013 DIVERSIFIED SHAREHOLDER STRUCTURE Foreign investors (mainly institutional) 26.3% Hungarian State 24.7% CEZ MH B.V. 7.3% OmanOil (Budapest) Limited 7.0% OTP Bank Plc. 5.4% Magnolia…
V. APPENDIX KEY UPSTREAM PROJECTS 53
KURDISTAN REGION OF IRAQ World class discoveries in row, already in the spotlight of majors Oil reserves potential around 45 Bboe* Kurdistan Region of Iraq Gas and associated gas reserves potential up to 6 Tcm (38 Bboe)*…
OVERVIEW OF MOLS ASSETS IN KURDISTAN REGION OF IRAQ Harvesting on first movers advantage entry in 2007 amongst the first ones ENTERING THE KURDISTAN REGION OF IRAQ IN 2007 Kurdistan Region of Iraq MOL has interest in four blocks…
AKRI-BIJEEL: COMMERCIALITY DECLARED Accelerated work program with 4 rigs Kurdistan Region of Iraq Key Upstream projects 2 successful oil discoveries: Bijell-1 & Bakrman-1 Bijell EPF facility ready for operation on Bijell-1 site,…
WORK PROGRAM 2014-2015 to derisk the significant petroleum original oil in place Kurdistan Region of Iraq Key Upstream projects E - expected spud - expected well test * Conditional, not fixed yet, dependant on FDP approval. 57
SHAIKAN: COMMERCIAL PRODUCTION STARTED, FIRST EXPORT CARGO IN JAN Gross production and sales of 20-40 mboepd in 2014 Kurdistan Region of Iraq Key Upstream projects Successful discovery and completion of five well appraisal program,…
STRUCTURE OF OUR PRODUCTION SHARING CONTRACTS SCHEMATIC OF PRODUCTION SHARING AT AKRI-BIJEEL BLOCK SCHEMATIC OF PRODUCTION SHARING AT SHAIKAN BLOCK Kurdistan Region of Iraq Oil produced Oil produced Royalty Oil Royalty Oil…
MOL ENTERS THE NORTH SEA REGION 10% IRR targeted in a stable, well developed region ASSET PROFILE Majority of the asset portfolio is already in development or production phase 2P (28 MMboe) reserve addition* with further already…
CATCHER AREA One of the largest discoveries in the UK in the last 5 years 3 main discoveries: Catcher (2010), Varadero (2011), Burgman (2011) 2 additional small recent discoveries: Carnaby (2012) and Bonneville (2013) North Sea…
SCOLTY & CRATHES with further MOL estimated 7 MMboe fully derisked 2C reserve Two small discoveries: Scolty (2007) and Crathes (2011) Stratigraphically defined fields in Paleocene sandstone with good reservoir North Sea…
DERISKED ASSETS WITH SIZEABLE SHORT-MID TERM PRODUCTION Two blocks contribute with 5 mboepd already in 2015 BROOM FACTSHEET BROOM First discovery 1976 Two separately developed compartmentalized oil Type Oil accumulations, North…
HUNGARY: MITIGATE THE DECLINE TO 5% FROM EXISTING FIELDS Along with several efficiency improvement measures to maximize cash-flow PRODUCTION AND FIELD DEVELOPMENT Central Eastern Europe 130 producing fields Accelerated…
CROATIA: BACK TO THE GROWTH PATH BY 2015 with significant efforts in field development PRODUCTION AND FIELD DEVELOPMENT Central Eastern Europe Close to 60 producing fields Deliver new volumes from ongoing development projects to…
KAZAKHSTAN: ENTERING FIELD DEVELOPMENT PHASE IN 2014 Likely upward revision of reserves on FED block after 7 succesful wells in row FEDOROVSKOYE FIELD MAJOR DISCOVERIES 7 successful well tests in row 3.900 boepd average flow rate with…
START OF EARLY PRODUCTION IS EXPECTED BY 2016 In the first phase of the field development focusing on early value generation FEDOROVSKOYE FIELD Finishing appraisal campaign with 1 well test left as well as update reserve estimates…
RUSSIA: A CORE COUNTRY AMID PORTFOLIO RESTRUCTURING Intensive work program continues on existing fields EXPERIENCES Primary target region: Volga-Ural, Western Siberia Over 10 years experience ensures technical capability in field…
PAKISTAN: INCREASING PROFITABILITY BY IMPROVING LIQUID OIL TO GAS RATIO More focus on condensate rich exploration blocks with higher interest HIGHLIGHTS 6+1 significant discoveries since 1999 Present in 5 blocks, in 3 as…
15 YEARS OF OPERATOR EXPERIENCE WITH 6 DISCOVERIES IN TAL BLOCK Accelerated work programs in other blocks in early phases TAL BLOCK Operated since 1999, 6 discoveries made by now Reserve base further increased with net 11 MMboe…
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