right investments with right technical scope in

Transcription

Dear Investors and Analysts,
Thank you very much for your interest in MOL – INA Investor Day in Pula.
Please find below the schedule for this 2 day event:
25 May,
18.00 – 21.00 Arrival
From 21.00
quick buffet dinner in the Hotel – Coffee Room-Glass Hall, no official program
26 May,
7.00 – 8.30
8.30 – 9.00
9.30 – 16.00
19.30
27 May,
7.00 – 8.00
8.00 – 11.15
8.00 – 8.45
8.45 – 9.30
9.30 – 9.45
9.45 – 10.30
10.30 – 11.15
11.15 – 11.30
11.30 – 12.00
12.00 – 12.45
12.45 – 14.15
12.45 – 13.30
13.30 – 14.15
14.30
Breakfast in the Hotel – Coffee Room-Glass Hall
Offshore platform visit – dress code: casual/outdoor
Bus transfer from Hotel to the harbour
Offshore platform visit with Lunch – Ocean King exploration platform - option visiting
also Annamaria production platform (in this case finishing at 18.30)
Official dinner in the Hotel (Taverna Restaurant) with menu and seating–
Welcome speech – Dress code for dinner and presentations: Casual Business
Breakfast in Hotel Taverna Restaurant
Upstream presentations
Zoltán Áldott EVP MOL E&P, Chairman of INA
Overview of the Upstream Activities and the 2010-12 plan
György Palásthy E&P Director of Integrated Field Application MOL and Zelimir
Sikonja Director of South-East Europe E&P INA
Enhancement of long term performance by new recovery methods and knowledge
transfer within the Group (Hungarian & Croatian onshore Exploration & Production and
unconventional projects)
coffee break
Bojan Milkovic INA CEO,
Key field development projects of INA – Croatian offshore & Syrian Hayan block
Attila Somfai Managing director Middle East, Africa and Caspian E&P MOL
Exploration is not gambling – International exploration projects (Pakistan, Kazakhstan,
Kurdistan region of Iraq)
Coffee break
József Molnár MOL Group CFO
Financial outlook of MOL Group and financial position of INA Group
Buffet lunch in Hotel Taverna Restaurant
Downstream presentations
Béla Kelemen VP of Refining MOL
How can we repeat our success in INA Downstream?
Peter Chmurchiak Executive Vice President R&M INA
Efficiency improvement opportunities in INA R&M
Bus transfer to the Airport arriving at 15.00
Please do not hesitate to call us any time, if you have any questions:
Rita Palicska +36/70/373 0789; Judit Huszárik +36/20/320 4712; Richard Benke +36/20/213 9741
Enjoy your stay!
MOL – INA IR TEAM
Overview of current activities and the 2010-12 plan that is
based on our key strengths and capabilities
Zoltán Áldott
President of INA Management Board
Executive Vice President of MOL Exploration and Production
May 27, 2010
Highlights of Exploration & Production activities
►
More than 7 decades of exploration and production experience in
CEE region with more than 300 oil and gas fields discovered
►
E&P activities in 15 countries with production in 7 countries
►
►
PL
Significant reserve and production base with further
exploration potential in the CEE region
A
Well-positioned player in the Middle East/Central Asia with
major development projects in Russia, Pakistan, Syria and
Kurdistan region of Iraq
►
Exploration drilling success rate between 65%-75% in recent
years and increasing exploration spending in the forthcoming
years
►
One of the most cost efficient operators amongst European
players
►
In-house drilling and oil service companies
Reserves breakdown – 2009*
IN
CN
Production breakdown – 2009**
Pakistan
Other
Pakistan
Other
Syria
IQ
Syria
Hungary
Russia
Hungary
Russia
Croatia
*: SPE 2P reserves
**: pro-forma joint production of MOL and INA in 2009 (excluding non-consolidated projects)
Croatia
2
Strong EBITDA generation, increasing investment
2008
2008
2009
EBITDA* (USD bn)
bn)
0.9
1.1
CAPEX**
CAPEX** (USD bn)
bn)
0.4
0.6
Production (boe/day)**
boe/day)****
86,300
135,
135,500
2P SPE Reserves
Reserves (million boe)****
boe
352.3
665.1
EBITDA (2012) – USD 2.5 bn
► Growing contribution to the Group level EBITDA
► Increase production to 140-145 thboe/d to 2012
► More favourable production mix
CAPEX (2010-12) – USD 2.6 bn
► Focus on high return development projects
► Exploration targeting significant resource base
► Key regions: Syria, Hungary, Kurdistan, Croatia and Russia
EBITDA*
EBITDA* (bn
(bn))
CAPEX** (bn
(bn))
3.0
1.2
2.5
1.0
2.0
0.8
2010-12 CAPEX
USD 2.6 bn
0.6
1.5
2.5
0.4
1.0
0.5
0.7
0.9
1.1
0.2
0.0
0.0
2007
2008
2009
2010E 2011E 2012E
0.2
0.2
0.1
0.2
2007
2008
*: excluding special items
** without acquisitions
***: pro-forma joint production of MOL and INA in 2009 (excluding non-consolidated projects)
****: SPE 2P reserves
0.4
0.1
2009
Exploration
Development
3
MOL Group systematically built its E&P portfolio in recent years,…
Portfolio building since 2005
►
Strong focus on adding further exploration potential
to the portfolio
►
15 international exploration licenses added to the
portfolio since 2005 through systematic portfolio
building and acquisition of INA
►
PL
A
Unit price of producing assets became more
expensive due to increasing hydrocarbon prices after
2004
IQ
IN
CN
Source: Global Upstream M&A Review
►
Acquisition of 10% share in Pearl Petroleum
Company in 2009, when oil and asset prices were
stressed
Projects acquired
before 2005
Projects acquired
in 2006-2007
Projects acquired
in 2008-2009
Focused and accelerated capability development
►
Exploration and development of HC reservoirs in complex geological environments
►
Investigation of up-to-date exploitation and production technologies, IOR/EOR/EGR solutions
►
New seismic processing technologies adopted in order to raise the probability of success on geologically complex areas
►
Geological and engineering preparation of low calorific gas utilization projects has been initiated.
►
Adaptation of new lifting technologies
4
…as a result: we currently have production activities in 7 countries…
CEE offshore
Croatia
Reserves:
65.0 MMboe
Production:
14,140 boepd
CEE onshore
Croatia, Hungary
Reserves:
373.4 MMboe
Production:
91,950 boepd
Russia
Syria
Hayan Block
Reserves:
55.9 MMboe
Production:
4,110 boepd
Other International
Egypt
Ras Qattara, West Abu
Gharadig,
North Bahariya, Sidi
Rahman
Angola
3/05 Block, 3/85 Block,
3/91 Block
Total reserves:
10.6 MMboe
Total production:
3,860 boepd
Note: SPE 2P reserves. Reserves and production of non-consolidated projects are not highlighted
ZMB
Reserves:
43.2 MMboe
Production:
14,970 boepd
Baitugan
Reserves:
63.6 MMboe
Production:
3,040 boepd
Matjushkinskiy Block
Reserves:
30.5 MMboe
Production:
2,040 boepd
Surgut-7 Block
Reserves
9.1 MMboe
Pakistan
Tal Block
Reserves:
13.8 MMboe
Production:
1,400 boepd
5
…and pursuing exploration activities in 15 countries
CEE offshore
Croatia
INAgip,
INAgip, EdINA
Recoverable resource potential*:
15 MMboe
CEE onshore
Hungary, Croatia
145 MMboe
Russia
Kazakhstan
Federovskoye
50 MMboe
Syria
Aphamia Block
10 MMboe
Kurdistan Region of Iraq
Akri-Bijeel, Shaikan
590 MMboe
Matjushkinskiy, Surgut-7 Blocks
160 MMboe
Pakistan
Tal, Margala & Margala North,
Karak Blocks
150 MMboe
Other International
Cameroon, Angola, Namibia,
Egypt, Yemen, Oman, India
500 MMboe
* working interest recoverable resources to be drilled in 2010-12
Note: further potential from non-consolidated projects, service contracts and unconventional projects
6
Detailed production & reserves breakdown
Reserves by product*
700
700
600
600
500
500
MMboe
MMboe
Reserves by country*
400
300
400
300
200
200
100
100
0
0
Hungary
Croatia
Russia
Syria
Pakistan
Other
Total
Oil
Condensate
Total
Production by product**
160
160
140
140
120
120
100
100
Thboepd
Thboepd
Production by country**
Gas
80
60
80
60
40
40
20
20
0
0
Hungary
Croatia
Russia
Syria
Pakistan
Other
Total
Oil
Gas
Condensate
Total
*: SPE 2P reserves
**: pro-forma joint production of MOL and INA in 2009 (excluding non-consolidated projects)
7
Key success factors of MOL Group E&P’s activities, that support…
Exceptional successful ratio
►
In 2009, our successful well ratio
was 75% in Hungary
►
Further successes are expected
with similar structures to be
drilled
►
Ongoing high impact drilling
program in Russian assets
Successful presence in the
Kurdistan Region of Iraq, Syria,
Pakistan
►
EOR/IOR/EGR activities
Low cost producer
►
Leading European low cost onshore producer
►
One of the lowest lifting costd
among European Upstream players
according to IHS Herold Global
Upstream Performance Review
►
Experience in asset management
►
►
►
Lifting cost*/boe in Europe (2003-2008)**
►
25
Successful partnerships
USD/boe
20
15
5
Unconventional exploration
0
►
►
Increasing
reserve
(baseline or incremental)
size
Creating strategic partnerships
Increasing lobby power in
mining authority issues
2004
2005
Peer group (median)
2006
2007
Peer group (min)
2008
Peer group (max)
►
MOL develops its unconventional
drilling cability in order to
maximize its value-creation from
its unconventional resources
►
Unconventional potential in 4
basins in Hungary and one in
Croatian-Hungarian border area
Net income/boe in Europe (2003-2008)***
50
40
USD/boe
►
MOL
Portfolio optimization through
strategic partnerships on Group
level
MOL participates in Ivanic-Zutica
EOR application project in Croatia
10
2003
►
Over 100 horizontal wells drilled
EOR / IOR
(Enhanced Oil
Recovery/Improved Oil Recovery)
upsides have been identified in
case of 34 Hungarian fields in
2007
Further efficiency improvement by
application of recently identified
and developed recovery methods
30
20
10
0
2003
MOL
2004
Peer group (median)
2005
2006
Peer group (min)
2007
2008
Peer group (max)
MOL Group’s competitive advantages provide sufficient basis for
further growth
* Includes Shipping/Transportation/Handling Expenses, Taxes other than Income, and Production Related G&A, ** Certain companies with more than 20$ lifting cost/boe
were excluded from peer group, *** Certain companies with negative net income were excluded from peer group
Sources: Global Upstream Performance Review (2004-2009)
8
…our significant investment plan to build platform for future growth
Capex* (2010-12 plan): USD 2.6 bn
►
Other
Kazakhstan
CEE
onshore
Kurdistan
Region of
Iraq
Exploration
►
Dev elopment
Paksitan
►
Syria
CEE
offshore
Russia
►
Focus on field developments aiming early cash
generation with key projects in Syria, Pakistan, Russia,
Hungary and Croatia
Increased conventional exploration activities compared
to previous years targeting significant resource
potential, aiming at 3-4% annual production growth
between 2012-15
Focusing on multiple basins with unconventional
potential in the CEE region
Increased EOR/EGR/IOR activities in order to exploit
full potential of existing proved resource base
Production** (2010-12 plan)
Resources** (to be drilled in 2010-12)
1800
160
1600
140
1400
120
1200
MMboe
80
thboed
thboed
100
60
1000
800
600
40
400
20
200
0
0
CEE + International
2009
CEE Depletion
International Depletion
Organic CEE Grow th
Organic International
Grow th
CEE + International
2012
CEE
Russia
Kurdistan
Kazakhstan
Pakistan
Syria
Other
Total Resources
*: not assuming any divestments and acquisitions
**: working interest production and recoverable resources from existing portfolio not assuming any divestments and acquisitions
(further potential from non-consolidated projects, service contracts and unconventional projects)
9
MOL’s efficiency leadership to be utilized on the Group level in order to
exploit significant synergy and efficiency improvement potential
Comparison of MOL and peer group performance (2003-2008)
Lifting cost*/boe in Europe (2003-2008)**
USD/boe
30.0
►
Highly competitive lifting costs
and unit opex maintained in the
crisis as well
►
One of the lowest lifting cost
among European Upstream
players according to IHS Herold
Global Upstream Performance
Review
20.0
10.0
0.0
2003
2004
MOL
2005
2006
Peer group (min)
2007
2008
Peer group (max)
* Includes Shipping/Transportation/Handling Expenses, Taxes other than Income, and Production Related G&A
** Certain companies with more than 20$ lifting cost/boe were excluded from peer group
Sources: Global Upstream Performance Review (2004-2009)
USD 50 million efficiency improvement potential annually from 2012 onwards
Optimization of portfolio on Group level
►
Optimization of production costs and maintenance activities
in order to decrease unit OPEX
►
Harmonizing procurement and HSE activities
►
Project management improvement
►
Utilizing a bigger expert pool and knowledge transfer
Partnering in certain projects
►
Rationalization of operations of service companies
UNIT OPEX***
10
USD/bbl
►
8
6
4
2
Hungarianonhsore
onshore
Hungary
Croatianonshore
onshore
Croatia
*** excluding DD&A
10
Enhancement of long-term performance by new recovery
methods and knowledge transfer within the Group
György Palásthy - Director of MOL Integrated Field Application
Šikonja Želimir - Director of INA South-East Europe E&P Sector
May 27, 2010
CEE onshore conventional activities – maximise recovery of existing
fields while exploiting further upside potential
Key Facts (2009)
►
373.4 MMboe 2P reserves
►
91,950 boepd production
►
31% of total upstream CAPEX
allocated on field development,
EOR and increased exploration
activities
►
6,000 boepd incremental
production from conventional
exploration and currently
undeveloped reserve base
►
145 MMboe recoverable
resource potential targeted
Action plan (2010-12)
Exploration
Production share CAPEX share
2009, 2012
2010-12
Highlights (2010-12)
2009
2012
Development
►
USD 175 mn CAPEX
►
USD 630 mn CAPEX
►
Targeting smaller prospects with high probability
►
Fast track development of new reserves
►
Seismic acquisition to identify new prospects
►
Development of low calorific value gas fields
►
8-12 exploration wells annually
►
►
Increased partnering to accelerate activities while
sharing risks and costs
Maximize recovery by using EOR/EGR/IOR
technologies
►
Efficiency enhancement to reduce operating costs
2
Exploration performance since 2006 in domestic exploration – focusing
on new concepts while increasing partnering
General characteristics
►
New concepts from 2006
Significantly increasing
partner contribution
Relatively stable CAPEX
2009 real price,
HUF bn
Partner ratios in expenditures
14
►
►
►
►
►
Drilling smaller individual
prospects with higher
geological probability closer to
existing infrastructure,
besides testing mid-size,
moderate risk prospects
Riskier activities (G&G) are
financed by partners as a fee
for opportunity to participate in
activity in MOL’s blocks
Higher success rates as a result of
new concepts
However number of domestic
conventional exploration
opportunities are decreasing
Average reserve discovered by one
well decreased, however
discoveries are still feasible due to
proximity of infrastructure
56%
60%
12
50%
10
40%
8
30%
6
20%
4
44%
32%
7%
10%
2
32%
26%
19%
0%
0
2006
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
G&G (including seismic)
Drilling costs
MMboe
90
6.0
80
70
60
50
40
30
20
10
0
2009
Partner contribution in total drilling cost
USD/boe
12
5.0
10
4.0
8
3.0
6
2.0
4
1.0
2
0.0
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Well success ratio
2008
3-year average finding costs
are relatively stable
Increasing success rate
with lower reserve sizes
%
2007
Partner contribution in total G&G expenditure
Other exploration cost
FC 3-year average
Reserv e by successf ul well
FC 2000-2009 average
3
Overview of Hungarian exploration – past and present
Past and present
►
MOL has 70 years experience in
exploration in Hungary
►
Leading player position within the
country by operating the most
prolific exploration licences
Distribution of drilled
wells
Distribution of 2D and 3D
seismic
Total number of licenses: 63
MOL’s share: 33 (52%)
Total licence area: 68,9 th km2
MOL’s share: 37,4 (54%)
Exploration licences in Hungary
►
Sustaining the value of the portfolio
by the systematic development of
the geological models in the
Carpathian Basin
►
Relying on our best competencies seismic sequence stratigraphic and
structural interpretation
►
Importance of partnership relating
to domestic exploration:
•
•
•
•
•
INA (Croatia)
Aspect Energy / HHE (USA)
RAG (Austria)
Expert Petroleum (Romania)
Ascent (UK)
MOL
4
Hungarian exploration - 2010
Exploration drilling - 2010
Completed exploration well
Domb-DNy-8……………………………..MOL
MH-DK-1………………………………….MOL
Spudding in 2010
Potony-1…………………………………..MOL-INA
Drilling in Progress
Mh-DK-2…………………………………..MOL
Waiting for Test
Sülysáp-É-2……………………………….MOL
Test in Progress
Ongoing drilling
Beru-4 (unconventional).………………..MOL
Körös-7……………………………………MOL-HHE
Dry
Drilled and waiting for test
Sark-2…………………….......................MOL
Mbh-D-1…………………………………. MOL
Domb-DNy-9……………………………..MOL
Commercial Gas
Commercial Oil
Ongoing test
Dravica-1…………………………………INA-MOL
Non-commercial Gas
Spudding in 2010
Kótpuszta-1……………………………….MOL-HHE
Beru-3 (unconventional)…….…………..MOL
Komádi-Ny-2……………………………...MOL- (HHE)
Seismic survey - 2010
Completed
Completed seismic survey
Zalata-Dravica East 3D……………………MOL-INA
In progress
Starts in 2010
Ongoing seismic survey
Lovászi 3D…………………………………..ASCENT-MOL
Seismic survey in 2010
Kunmadaras 3D…………………………….MOL
Barlahida 3D…………………………...…...MOL
5
Focused on unconventional activity
Unconventional exploration
►
►
►
Unconventional resources play an increasing role in worldwide hydrocarbon production
MOL is the largest acreage holder for unconventional plays in Hungary and is the owner of a well-developed infrastructure
MOL devised a differentiated strategy for various Hungarian basins with unconventional potential
Key facts (2009)
►
Unconventional potential in 5 different basins
Derecske
Basin
Békés Basin
Zala
Basin
Dráva
Basin
►
Total area of more than 3,500 km2
►
Total risked resource potential under assessment
Makó Basin
Capabilities
Activities
►
Technical study prepared which proved the
unconventional potential for multiple basins
►
Allocated CAPEX to be confirmed later based on
exploration results
►
Benefiting of MOL’s local strengths (local geology,
acreage position, well-developed infrastructure)
►
2-4 year exploration and appraisal program
►
Preparation of studies on Dráva and Zala basins
►
Testing the potential of Derecske and Békés basins by
drilling 4-6 wells
6
Derecske basin
Exploration activity of MOL in
Derecske basin
Derecske
Basin
Békés Basin
Zala Basin
►
MOL license cover 100% of the basin
►
Exploration program carried out by MOL
Makó Basin
Drava Basin
• Drilling of Beru-1: continuous sub-commercial gas
production
• Drilling of Beru-2: prove presence of gas
4
►
Technical study show characteristics of the basin
1
• Volumetric potential of Derecske basin is smaller
compared to Békés and Makó basin
• Geological and HC system is absolutely different
from any other basins in Hungary
2
3
• Target: Middle Miocene Tight Gas
►
Next steps
• 2010 drilling of 2 wells
• 2011: drilling and testing of wells
• 2012: testing of wells
Targets of exploration program:
1 – Field analogy
2 – Structural prospects
3 – Non - structural position
4 – Deeper Basin Upside
7
Overview of Hungarian production – past and present
►
►
Distribution of operating
technologies
Distribution of discovered
fields
Past and present
MOL has a dominant role in
Hungarian hydrocarbon production
Fényeslitke
Tiszaújvá ros
MOL is operating in Hungary wide
range of technologies, mainly in
four main basin at a low production
cost
Gyõr
Kom árom
Budapest
Hajd úszobo szló
Adony
Compr esso r sta tion
Zala ege rszeg
Pump sta ti on
Városföld
Pusztae deric s
Refine ry
Szank
►
Kardoskút
MOL’s significant Hungarian asset
base includes:
H ydro carb on field
Maros1
Zsa na
Csurgó
Algyő
U nder grou nd Gas Stor
G as line
Crude oil l ine
•
132 producing fields
•
167 mining plots
•
5413 wells
•
174 technologies
•
3 gas processing plants
Production history since 1937
10 000
8 000
Oil production
2009
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
0
1957
Algyő field has a very dominant role
in Hungarian production
1953
►
2 000
1949
Gas production reached its peak in
1986 (6.7 bcm)
1945
►
4 000
1941
Oil production reached its peak in
1980 (2.0 million tons)
1937
►
Mtoe
6 000
Gas production
8
Hungarian production
Main domestic production areas
Competitive advantages
Hosszúpályi-South gas field
Palaeogene area
Several newly discovered fields
Since the exploration in
with remarkable potential,
1999, Palaeogene area oil
providing 10% of domestic gas
and gas-condensate fields
production in 2009
have been playing a
significant role and in 2009
A MOL19%
Nyrt.of
jelentõsebb
termelõ mezõi
provided
domestic oil
►
Experience in asset management
►
Leading European low cost on-shore
operator
►
Enormous operation and field
development experience
►
Effective joint activities with partners
►
Outstanding relation and co-operation
with authorities
►
Review and screen all the assets
systematically and periodically
Készült: a DTA-200 2.0 jelzésû digitális
térképmû felhasználásával
Átnézeti térkép
0
10
20
30
40
50 km
Demjén
Tóalmás-D
Hosszúpályi
Dány
Nagykáta
Ölbõ CO2
Fegyvernek
Gomba
Nagykörû
Kismarja-Ny
Kisújszállás-Ny
Szeghalom
Földes-K
Mezõsas-Ny
Yearly domestic production (MMboe)
Endrõd-É
Dévaványa
Bajánsenye-Õriszentpéter-D
Martfû
Endrõd
Nagylengyel
Ortaháza
Budafa Sávoly
Sávoly-D-K Mezõcsokonya-Ny
Szank-ÉNY
Szank-Ny
Tázlár
Kiskunhalas-ÉK-É
Kiskunhalas-ÉK
Kiskunhalas-D
Jánoshalma-Új
Ruzsa-É
Borota
Öttömös-K
30
Méhkerék
25
Szank-ÉK
Szank-DK
Pusztaföldvár Csanádapáca
Csólyospálos-K
Kaszaper-Nagybánhegyes
Kömpöc-D
Dél-Békés
Tótkomlós-D
Kiskunmajsa-D
Mezõhegyes
Mezõhegyes-Ny
Algyõ Battonya
Battonya-K
Üllés
Szeged-Móraváros
Színkulcs:
Gáztermelõ mezõ
Olajtermelõ mezõ
Olaj- és gáztermelõ mezõ
Barcs-Ny
Földgáz: 0,5-1,5 milliárd m3 között, olaj: 100-500 e tonna között
Kutatás-Termelés Divízió
Földgáz: 0,5 milliárd m3 alatt, olaj: 100 e tonna alatt
Algyő
Algyő field
Szolnok, 2007.június 22.
Gas field
Oil field
Oil and gas field
10
5
Földgáz: 1,5 milliárd m3 felett, olaj: 500 e tonna felett
MOL Nyrt.
17,1
16,6
17,7
15
0
Termelési volumen:
Görgeteg-Babócsa
20
14,4
14,3
13,1
7,7
6,7
6,5
6,0
5,6
5,4
3,8
3,5
3,4
2,6
2,7
2,4
2004
2005
2006
2007 *
2008
2009
Gas
Oil
Condensate
* without production of Sző
Szőreg
As a dominant area, in 2009 Algyő provided
40% of total domestic oil and gas production
9
Focused on EOR / IOR activity
Aimed objectives and benefits of EOR / IOR
RFo = 32,4 %
URFo = 35 %
►
Reducing „remaining” HC in reservoirs
►
Increase volume of proved reserves and production level
►
Extra production means extra profit contribution for the extended lifetime of HC-fields
►
Better usage of existing surface and sub-surface assets and technologies
►
Partial usage of produced inert gases
►
Improve our EOR / IOR knowledge/technologies more further
►
Postponement of field abandonment cost
►
Potentially spared quota for CO2 emission
Potential
+13%
+ 1,2 Tbbl
RFo = 8 %
URFo = 22 %
Daily oil production (th. bbl)
Future importance of EOR / IOR
140000
Existing capacity
120000
EOR
100000
New discoveries
80000
Development of
existing resources
60000
Unconventional
40000
20000
0
1970
1980
1990
2000
2010
2020
2030
10
MOL has gained competitive advantage through utilizing the
experience of 40 years in EOR / IOR technologies
Complex field investigation
►
In 2008 130 domestic fields were investigated and 30 Hungarian fields showed remarkable upsides representing 20-25 MMboe of
additional reserves
►
In 2009 we continued the preparation for more than 10 EOR / IOR projects
►
In future MOL and INA will work together to exploit EOR / IOR opportunities like Ivanic-Zutica EOR application
►
High demand for EOR / IOR knowledge in the MENA region
Applied methods in Hungary since the late 60’s
Nagylengyel
►
►
water flooding
steam injection
► in-situ combustion - air injection
► microbiological EOR (MEOR)
►
artificial gas cap by
CO2 injection
chemical flooding
experiment (ammonia)
Algyő
Algyő
water flooding
► polymer flooding experiment
► polymer/silicate gel treatment
► lean gas injection and vaporization
► ethane reach gas injection
►
HC gas injection
► water flooding
► partially miscible CO2 flooding
► WAG silicate gel injection*
► in-fill wells
►
Conventional Production
Secondary Methods
Tertiary Methods
Pusztafö
Pusztaföldvá
ldvár
pressure maintenance by non-miscible CO2
and water injection,
► water flooding
►
Újfalu
jfalu
MEOR experiment
56.2
mmto
►
Budafa
►
4.6
mmto
34.2
mmto
Demjé
Demjén
Kiskunhalas
Szank
HC gas injection
► water flooding
►
partially miscible
CO2 flooding/injection
►
Kiskundorozsma
►
water flooding
Móravá
raváros
►
water flooding
* WAG: Water Alternate Gas
11
Case study - EOR application in Nagylengyel field
Challenge
►
►
►
►
Reservoir rock: karstic carbonate
►
Old wells, well integrity
problems
High H2S content of the
injected gas
Corrosion
Complex reservoir
properties (fractured
carbonate reservoir)
Current environmental
concerns (CO2 disposal
after depletion of the field)
Solution
►
►
Pilot testing
Field trials in multi phases
Components of success
►
►
►
►
Understanding the karsts
system and primary recovery
(long production history,
water influx)
Near natural CO2 resource
Reservoir management
monitoring (oil front
movement)
High standard laboratory
experiments and exploitation
plans
Applied methods
►
Artificial gas cap by CO2
injection on the reservoir top
►
Chemical flooding experiment
(ammonia)
RESULTS / LESSONS
LEARNT
►
►
►
Significant oil recovery increment (RFo= 55%)
Notable differences in oil increment from block to block
Importance of the real time reservoir monitoring
12
EOR process consists of 3 stages
I.
create an artificial
gas cap
II. gas withdrawal
Producer well
III. oil displacement
with water
CO2 Injector well
oil
oil
13
Development and improvement relating to Hungarian operation
Actions have been implemented
Expenditures of production operation
Total cost of production operation
Production operation cost
HUF bn
►
Further development of producing gas fields in order to
sustain production levels
►
Development of low calorific value gas fields
►
Rationalization of energy and technology systems
►
Utilization of existing technological equipment and assets
– technological streamlining
►
Zero Based Budgeting (ZBB) in operational planning
►
Adoption of RBWS (Risk Based Work Selection)
maintenance
►
Operating dedicated maintenance staff for service
providing
►
Training of operators in „Jolly Joker” course is attaining
continuously in different extent by areas based on the
professional competencies and the completed training
modules
►
Planning-scheduling process had started considering the
experiences of pilot in 2008
3,1
2,4
2,8
21,6
22,1
21,9
23,4
2005
2006
2007
2008
2,4
2,0
20
15
10
Fast track development - accelerating development
programs for both producing fields and new discoveries
Minor CAPEX
30
25
►
20,8
5
0
2009
Changing cost elements in connection with restructuring of
maintenance system
Staff cost
Maintenance cost
Minor CAPEX
14
12
2,4
2,8
5,3
2,4
3,1
4,8
3,8
3,0
5,3
5,6
6,1
6,7
6,1
2005
2006
2007
2008
2009
HUF HUF
bn
10
8
2,0
2,2
6
4
2
0
►
From 2005 the maintenance costs of surface material assets had decreased radically year by year
►
Keep all cost in one technically responsible and financially accountable hand = COST & FIELD MANAGEMENT
14
Russia – stable production in forthcoming years
Key facts (2009)
►
►
►
14% of total upstream CAPEX on
fast track field development and
exploration activities
►
production increase from
greenfield projects balancing
natural decline of ZMB
►
2009, 2012
2010-12
2009
2012
Exploration
Development
►
USD 50 million CAPEX
►
►
Prolongation of exploration licenses in Matjushkinskiy
and Surgut-7 exploration projects in 2010
►
Drilling 130-150 production and injection wells and reentries
►
Drilling of 6-8 exploration and appraisal wells
►
►
Acquiring 150 km 2D and 150 km2 3D seismic
Extending infrastructure in line with increasing
production
►
Peak production expected in 2016/17
15
Croatian exploration - 2010
Selec-1 is the first onshore exploration well to be drilled on sole risk by INA for the past 10 years
Details of well Slc-1
OBJECT’S PARAMETERS
Target depth for gas: -1435 m (TVDSS)
Target depth for oil: -1860 m (TVDSS)
Expected fluids: GAS & OIL
Reservoir rock: sandstone
Area of gas layer: 1.451 km2
Area of oil layer: 2.615 km2
A
DRILLING PARAMETERS
Total Depth: 2100 m
Number of DST: 2
Slc1
B
Geological map of top of oil reservoir
Slc-1
Selec-1 is located between field Zutica & Vezisce to the
North of Sisak town
A-B seismic profile with planned Slc-1 well
16
Cross-border joint exploration
Novi Gradac - Potony joint
exploration project
Zaláta - Dravica joint
exploration project
Signed in September, 2006 as the first crossborder exploration partnership established
between MOL and INA
50% MOL - 50% INA interest
Covers 400 km2 area
Gas discovery made in 2007
►
►
►
►
►
►
►
►
Signed in September, 2007 as a result of successful
Zaláta - Dravica cooperation
50% MOL - 50% INA interest
Covers 244 km2 area
Acquisition of 189 km2 3D
Milestones of co-operation
Hu
ng
Cr
oa
tia
2004 - Zaláta 2D seismic (54 km)
ar
y
2006 - Drilling of Zaláta-1 exploration well (3515 m)
2006 - Ferdinandovac - Vízvár 3D seismic (A) (120,21 km2)
2007 - Well test of Zaláta-1
A
2008 - Drilling of Dravica-1 exploration well (3500 m)
2008 - Novi Gradac - Potony 3D seismic (B) (183,4 km2)
Potony-1
MOL-INA 3D
B
MOL-INA drilled wells
2009 - Drilling of Potony-1 exploration well (3628 m)
Zaláta-1 Dravica-1
2009 - Zaláta - Dravica East 3D seismic (C) (138,6 km2)
2010 - Well test of Potony-1
Area of data exchange
C
2010 - Well test of Dravica-1 (ongoing)
Exploration blocks
2010 - Interpretation of Zaláta - Dravica East 3D
Gas producing well
2011 - Exploratory drilling on Zaláta - Dravica East
Well with gas presence
17
Croatian production - onshore
Production areas
Past and present
Number of assets
Yearly domestic onshore
production (MMboe)
20
15
9,4
10
5
0
8,6
8,4
Gas
7,1
6,6
6,0
5,0
4,7
4,6
4,4
4,1
3,9
2,8
2,7
3,1
3,0
3,0
2,7
2004
2005
2006
2007
2008
2009
Oil
Projects in progress
►
35 oil fields
►
Molve - compressor production start-up
►
18 gas condensate fields
►
Additional workover activities
►
4 geothermal
►
Production optimisation of domestic
onshore production activities
Condensate
18
Co-operation in production
Ivanic - Zutica joint
EOR project
►
►
►
►
►
Stari Gradac - Barcs joint
production project
Pilot CO2 injection performed on the oilfield
Ivanic between 2003 - 2006
Based on the previous full-field Feasibility
Study (FS), INA received necessary data for
the EOR project
Based on FS, 80 % of the major surface
equipment was delivered
INA has involved MOL to prepare technical
and economic evaluation together before
continuing the project
May 2010 ⇒ FS revision finished and new
financial indicators were determined
1st phase
Ivanic and Zutica North
400 000 m3/d
Exploration carried out in the 1970’s and
1980’s separately by MOL and INA
►
16 wells were spudded in the area
►
Originally governed by Yugoslavian Hungarian intergovernmental agreement
►
Joint expert teams / committees controlling
operations
Short summary
►
Primary goal is to produce and sale an additional 3,4 million tons
of the oil and 599 million m3 of the gas
►
Secondary goal is CO2 sequestration amounts to 2,7 billion m3
( 5,4 million tons)
200 000 m3/d
2nd phase
Zutica South
600 000 m3/d
►
Timetable
►
Project (RE) starting: Q1 2011
►
Commissioning starting : Q4/2012 - Q1 2013
►
Project completion: Q1 2013
19
Key field development projects of INA providing
strong platform for day-to-day operations and
medium term growth
Bojan Milković
Chief Executive Officer of INA
Executive Director of INA Exploration and Production
May 27, 2010
Adriatic offshore – providing significant production growth
until 2012
Key facts (2009)
►
►
►
field development, EOR and
maintenance activities
►
production increase from
improved recovery projects and
conventional exploration
►
15 MMboe recoverable resource
potential targeted which shall be
increased significantly
2009, 2012
2010-12
2009
2012
Exploration
Development
►
►
►
Ongoing joint review by INA-MOL experts for further
potential
►
Development of recent discoveries
►
Gas production optimization by drilling further wells and
connecting platforms
►
Applying new concepts by investigating and testing thinlayer-type reservoirs
►
Partner involvement in the Mid and South Adriatic offshore
areas as well as in the Dinarides to exploit full potential of
Croatian offshore areas
2
North Adriatic Projects
Fields operated by EDINA
INA 30%, EDISON 30%
PSA agreement
-Isabela signed 2002
IZABELA N
10”
(2,7km)
IZABELA S
16” (26,2 km)
ANNAMARIA A
IKA A
ANNAMARIA B
IKA B
Fields operated by INAgip
INA 50%, ENI 50%
2 PSA agreements
-North Adriatic signed 1996
-Aiza-Laura signed 1997
3
INAgip: Geographical overview
1
2
4
3
Pipelines incorporated with ENI-INA PSAs
1 IVANA K-Pula (operator: INA)
2 IVANA K-Italian border (operator: INA)
3 Italian border–Garibaldi platform (operator: Adriagas)
4 Garibaldi platform- Casal Borsetti (operator: ENI)
4
Project pipeline
Discoveries from
1974 to 1999
Ika – 1979,
Annamaria - 1979,
Irina – 1985
1973
Discovery of
Ivana gas field
1973
October 1999
Ivana gas Field
production Start
up of manned
platform Ivana A
June 27 1997
Signing of the
Aiza Laura
PSA
1996
1997
February 27
1996
Signing of the
North Adriatic
PSA
1999
March/May 2006
Compressor platform
Ivana K and platform
Ivana C
2003
Discovery of
Katarina gas field
2000
2001
2002
2003
2004
2005
2006
2007
November 2004
Marica gas Field
production Start up,
platform Ivana A
2000
Discovery of
Marica gas field
December
2000
Start up of
platform Ivana
E
- North Adriatic Contract Area
- Aiza Laura Contract Area
November
2009
Annamaria
gas field Start
up,
platform
Annamaria A
December 2006
Connection with
Croatian network,
pipeline Ivana K –
terminal Pula
2005
Discovery of
Ana and Vesna
gas fields
Jan /May 2001
Start up of
platform Ivana
D&B
March 2009
Irina gas field
Start up,
platform Irina
2008
2009
2010
December
2008
Ana gas field
Start up,
platform Ana
February 2006
Ida gas field production
start up, platforms Ida
C&B&A
February 2009
Vesna gas field Start up,
platform Vesna
March/May 2006
Ika gas field
production start up,
platforms Ika
A&B
December 2006
Katarina gas Field
production Start up,
platform Katarina
5
Key facts
Personnel
Offshore Platforms
►
17 platforms
►
Total number of involve employees – 100
2 manned (Ivana A, Annamaria A)
► 40 in offshore operations
1 with lodging capability (Marica)
► 60 in HQ in Zagreb
1 compression platform (Ivana-K)
13 unmanned
►
►
All people are former employees of INA or ENI
►
INA provides technical support on
40 people on platforms in 2 rotations with 20
people per rotation (1 rotation = 2 weeks)
► ~80% of the employees are Croats
non-
technical competency as
► Procurement
► Assets are new (less than 10 years)
► Legal
► HSE
► Logistics
Logistics
►
Logistics managed out of Pula with occasional
support from Zadar Base and Ravenna Base
►
3 ships supply platforms on daily basis
6
Production Network
►
►
►
Platforms : 17 production
1 compressor
Currently 40 wells are in production
7
Recent developments, key tasks ahead
Developments in 2009
►
Installation of gathering systems on the Vesna
and Irina gas fields
►
From Annamaria platform 6 new wells were
drilled and completed, with production start
up at the beginning of November
Shipping Annamaria A platform
Key tasks ahead
►
Gas field optimization on Annamaria field
►
Gas filed optimization Ivana A block
►
Development of gas field Ika/5-30-028
Mass of process decks – 1705 T; Living quarter
+ helidek -362 T
8
Fiscal regime
Total Revenue
Fiscal Terms
Eni’s minimum production share - Eni’s
minimum profit share is 12% in case of
Ivana and 15% in case of Aiza-Laura PSA
►
INA pays the total Royalty and CIT of
the projects (on behalf of ENI as well)
Eni’s cost recovery share – Eni can
recover its CAPEX and OPEX from 38%
(Ivana PSA) and 35% (Aiza-Laura PSA)
of total available production. If the costs
to be recovered are lower than the cost
recovery share, the excess cost goes to
INA.
►
Corporate Income Tax: 20%
►
Royalty: increasing from 3.1% to 10%
until 2015 and 10% thereafter
Year
2010
2011
2012
2013
2014
2015
Rate
3.1%
3.6%
4.1%
4.6%
5.1%
10.0%
INA’s minimum production share (50%)
9
EDINA – Izabela project
Recent developments
►
►
►
►
►
►
Drilling 2 and completion 3 production wells
on Izabela North
Izabela South hook up and comm.
Upgrade Ivana A/K for accept Izabela gas
Start up Izabela South (Qg= 340 000 m3/d)
Izabela North hook up and comm.
Start up Izabela North (Total Qg= 740 000
m3/d)
Export routs
Izabela North platform
IZABELA
NORTH
PLATFORM
3” PIPELINE FOR
SEPARATED
WATER, 2,7 km
PULA
10” GAS
PIPELINE 2,7 km
16” GAS PIPELINE TO
IVANA K, 26,2 km
IZABELA
SOUTH
PLATFORM
CASALBORSETTI
EXPORT ROUTE TO
CROATIA
Building platforms
►
Izabela South and Izabela North
► Building sealines
►
sealine 16 “ (26.3 km) Izabela South - Ivana
K,
►
sealine 10 " and 3" (3.1 km) Izabela South Izabela North
► Drilling/completion 2 production wells on
Izabela South
►
Tasks ahead
GARIBA
LDI
EXPORT ROUTE TO ITALY
IVANA A / K
PLATFORMS
10
South Adriatic (Central) potential
►
100% concession rights assigned to INA
►
Water depth: 60-250 m
►
Seismic available: 13,483 km of 2D seismic sections & 1000 km2 3D seismic
►
21 exploratory wells on the block
►
600 seismic lines on WorkStation
►
Potential leads/prospect on area Srednji Jadran
►
4 biogenic gas leads in Pleistocenic clastic, structural
trap type
►
1 oil prospect in MiddleTriassic complex “Vlasta”
Current activities
►
Project team is appointed for the
purpose of prospects evaluation
Planned activities
SURFACE: 15 898 km2
►
2D seismic acquisition
►
Exploration well
11
South Adriatic (South) potential
►
100% concession rights assigned to INA
►
Water depth: 100-1200 m
►
5 exploratory wells on the block
►
6692 km of 2D seismic available; vintage
►
Potential leads/prospect on area Juzni Jadran
Several oil leads in Paleogene-Cretaceous
barrier reef complex
► 1 oil prospect based on cross border
Croatia/Montenegro structure and oil presence
in JJ-3 well (Montenegro)
►
1978-1989
Current activities
Data base partly on WorkStation
►
Project team is appointed for the purpose of
prospects evaluation and supporting farm-in
activities
Planned activities
►
2D/3D seismic acquisition
►
exploration wells
BLOCK SURFACE: 10 758 km2
12
Syria – fast-track development of Hayan block to strengthen production
base by 2011 while testing exploration potential of Aphamia project
Key facts (2009)
►
►
►
field development and increased
►
increase from Hayan block
►
potential targeted
2009, 2012
2010-12
2009
2012
Exploration
Development
►
►
►
Drilling of 2-4 exploration and appraisal wells
►
►
3D seismic activities to assess potential of Aphamia block
Construction of gas-treatment plant with LPG plant in
Hayan block by end 2010
►
Drilling of multiple production wells
►
Peak production expected in 2012/13
13
Syria - Hayan Block – General layout
► PSA between INA Ltd. and Government of the Syrian Arab
Republic and Syrian Petroleum Company was signed in 1998
► Hayan Block is operated by Hayan Petroleum Company (HPC, 50%
INA, 50% SPC)
► Hayan Block area: 4,795 km2
► First Well was drilled in 1998
► Exploration Period expired in 2007
► Commercial Discovery of 6 Fields
14
Overview of the drilling and production activities
►
On Hayan Block was drilled 23 wells up to date
►
17 Exploratory Wells (10 positive)
►
6 Development Wells (4 positive)
►
Production start in 2005 with early stage production from Jihar Oil Station
►
Currently in production 9 wells
►
2009 commencement of Oil-Gas Station Jihar
15
Project timeline
September 2009
Completion of
Jihar Oil and Gas
Station: the station
consits of a
gathering and
transportation
system for 5 wells
on Jihar and Jazal
field, an a 20/0.4 kV
transformer
station.
July 2008
Commissioning of
Jihar export pipeline
system
Discovery of Mazrur
field
August 2005
Completion of Jihar Oil Station – the commissioning of the oil station also
meant the production start-up of Jihar field
Discovery of Jihar Field
1998
1999
2000
Discovery of Mustadira Field
2001
Discovery of Palmyra Field
2002
2003
2004
Discovery of Jazal Field
2005
2009
Production
Startup of
Palmyra Field
2006
2007
2007
Commissioning of
10 kV OHL to Jihar
field
November 2007
Production startup of
Jazal field
Discovery of Al Mahr
Discovery
Facility commissioning
2008
2009
2010
2009
Production Startup of Mazrur
Field
May 2008
Starting date of Jihar Project
Stage 3 – the project includes the
construction of the Jihar Gas
Treatment Plant and the
gathering and transportation
system of Al Mahr & Jihar fields
Production startup
16
Gathering facilities
Construction of Gathering System
►
►
Oil & Gas Station Jihar - Project Stage 2 - gathering and
transportation system, commencement from September
2009.
Gas Treatment Plant Jihar - Project Stage 3 - gathering
and transportation system, LPG Plant, commencement
March 2011
Oil-Gas Station Capacity
Q gas (Sm3/day)
670,000
Q oil & cond (m3/day)
1,000
GTP Capacity
Q gas
(Sm3/day)
Q oil & cond
(m3/day)
Q LPG (m3/day)
4,000,000
1,800
350
17
Outlook of the drilling and production activities
►
3 new wells to be drilled in 2010
►
2011 full profile production upon finishing of GasTreatment Plant Jihar
►
Peek production in 2012
►
For full Production profile committed by Development
Plans 3 more wells need to be drilled in period 20112013
►
Further potential for production increase to be evaluated
18
Additional potential
HAYAN BLOCK – NEW PROSPECTS
►
Initiating a new Exploration program on Hayan block
►
8 new potential prospects INA’s advantage on new
prospects:
►
Know-how – well design, drilling, development
programs
►
Existing gathering system
►
Good relations with Government of Syrian Arab
Republic
APHAMIA BLOCK
►
Current status: First Extension of Initial Exploration Phase
►
Initial Exploration Phase (4 years): signed in 2004.
►
First Extension of Initial Exploration Phase (2 years) from
August 2008 until August 2010
►
Contractual obligations during that period:
►
270 km2 of 3D seismic acquired (2009)
►
Drilling of two new exploratory wells
►
Beer As Sib-1 well-drilling in progress
19
Exploration is not gambling - Key recent exploration
successes and further projects that add significant
impetus for long-term growth
Attila Somfai
Managing Director of MOL Middle-East, Africa & Caspian E&P
May 27, 2010
MOL Group’s upstream portfolio: solid basis for further growth
Two decades of intensive exploration in the international area has resulted significant knowledge
PRODUCTION
EXPLORATION
►
Since beginning of 1990’s, besides Hungary
and Croatia, MOL Group has been present in
17 foreign countries as operator or partner
►
During this period MOL Group co-operated
with companies of international prestige,
such as Chevron, Occidental, Enterprise,
Premier, Amerada Hess, Deminex and OMV
►
Hydrocarbon exploration activity provides
considerable value generating opportunities
and is the key organic contribution towards
upstream reserve replacement
►
Current E&P activities in 11 foreign
countries with production in 7 countries
► Focus on international projects from
2006
► Successful exploration activities with
sizeable discoveries in the international
arena in the Kurdistan Region of Iraq,
Kazakhstan and Pakistan
► Well-positioned player in the Middle
East/Central Asia with major
development projects in Russia,
Pakistan, Syria and Kurdistan Region of
Iraq
Current exploration activities
Previous exploration activities
2
MOL Group has increased the number of portfolio elements significantly
during the past 4 years
Highlights from 2006 until now
Distribution of new projects from 2006
►
9 new project are acquired in the region
►
7 of 14 wells are successful owing the successful
exploration in Pakistan, Kazakhstan and Kurdistan
►
Discovered 2 new fields
Kazakhstan, 2 in Kurdistan
in
Pakistan,
1
in
Number and distribution of New Opportunity evaluation
KURDISTAN
Block Akri-Bijeel
PAKISTAN
Block Karak
KURDISTAN
Block Shaikan
PAKISTAN
Block Margala
KURDISTAN
PEARL
Exploration strategy
OMAN
Block 43B
INDIA
Block HF-ONN-2001/1
CAMEROON
Block Ngosso
NAMIBIA
Block Zaris
MOL operated licenses
Partnership
New projects from 2006
►
MOL Group is a long term player in the region
►
Experience in exploration
complicated areas
►
Proved financial and technical capability
►
Aims during an exploration campaign
of
structurally
►
Discover the total block potential
►
Minimize exploration risk and exploration
cost
3
MOL Group’s current exploration portfolio
Russia
Iraq – New hot spot area
►
►
►
Shaikan Block (partnership):
Discovery in 2010
Akri-Bijeel Block (operatorship):
Discovery in 2010
PEARL Company: Chemchemal
gas and condensate field
Matjushkinshkaya and Surgut-7
Blocks (operatorship): Drilling of 68 exploration and appraisal wells
►
Kazakhstan
►
Fedorovskoye Block (operator
shareholders): Discovery based
on new exploration idea
►
TAL Block (operatorship): Beside
production intensive exploration
activities are going on
Margala and Margala North Block
(operatorship): Testing of
prospectivity by drilling 2 wells in
2010-2011
Karak Block (partnership): Similar
hydrocarbon system is predicted
as in TAL block
Syria
►
Aphamia Block (operatorship):
Testing of prospectivity by drilling a
well
Pakistan
Egypt
►
►
East Yidma (operatorship): Testing
of prospectivity by drilling a well
East Kalabsha Blocks
(partnership): Exploration works
will be abandoned May 2010
►
►
Cameroon
►
Ngosso Block (offshore,
partnership): advanced seismic
interpretation
Angola
►
3/05A Block (offshore, minority
partnership): Results of new well
will determine the future strategy
Namibia
►
India
►
Zaris Block (operatorship): high
risk/ high reward exploration in
frontier area
Himalayan Foothills (partnership):
Testing of prospectivity by drilling a
well
Oman
►
Block 43B (operatorship):
Exploration based on new
geological conception
4
Exploration performance 2000-2010 – Increasing exploration activities
Since 2000, characteristics of MOL’s exploration activities changed markedly
EXPLORATION SUCCESS RATE
(2006-2009)
EXPLORATION SUCCESS RATE
(2000-2005)
INCREASING EXPLORATION ACTIVITES
WITH NEW FOCUSES
MMUSD
29%
70%
20%
40%
average
average
►
►
►
Expanded
international
portfolio resulted in significant
increase
in
exploration
expenditures
Stable domestic investment
level with new concepts from
2006 resulting in higher
success rates
Successful
exploration
activities
resulted
in
significant
increase
of
reserves replacement from
our international projects
RESERVES ADDED (2000-2005) – „Proved”
MMboe
RESERVES ADDED (2006-2009) – SPE 2P
MMboe
60
50
40
30
20
10
0
Domestic exploration
International exploration
5
International exploration - geographical focus has been changed from 2006
INTERNATIONAL EXPLORATION
BUDGET BY COUNTRY
HIGHER RESERVE SIZES AT BIGGER
UNCERTAINTY
►
MMUSD
International exploration wells drilled
7
6
5
►
4
3
2
►
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Unsuccessful
MOL Upstream has been
systematically
building
its
portfolio since 2005 mainly
through gaining new green-field
exploration projects
Increased exploration activities
resulted in a number of
discoveries
In 2009 major discoveries were
made
in
the
Shaikan,
Fedorovskoye and Tal block
Successful
INTERNATIONAL 33-YEAR AVERAGE
FINDING COSTS
►
►
►
Until 2005 the Pakistani and Yemeni
projects dominated the exploration
activities
Due to the successful activities and
further portfolio building after 2007,
the Pakistani expenditures further
increased
After 2008 new core areas (like
Russia
and
Northern
Iraq)
represented significant part of our
expenditures
USD/boe
►
3-year average finding cost was 5.8
USD/boe in 2008 while average for
the period is 7.4 USD/boe
6
MOL past and planned exploration activities (2005-2012) in MEAC region
Seismic activity during years 2005-2012
6000
5920
2D seismic (km)
3D seismic (km2)
5000
4000
3000
1866
2000
800
220 330
1000
200 400
70
300
0
2005-2008
2009
2010
2011
2012
Drilling activity during years 2005-2012
9
8
7
6
5
4
3
2
1
0
Appraisal wells (pc.)
9
9
7
6
5
4
4
3
2
0
2005-2008
2009
Drilled wells (expl.+ appr.)
5
4
Number of wells
Number of wells
Exploration wells (pc.)
Drilled wells vs. Successful wells
4
4
3
3
2
2
2011
2012
3
2
3
2
1
0
2010
Succesfull wells
2005
0
0
2006
2007
2008
2009
7
PAKISTAN
8
Pakistan - major production increase in 2010
Key facts (2009)
►
►
►
field development and increased
►
5,000 boepd production increase
primarily from ramp-up of Tal
block
►
Exploration
2009, 2012
2010-12
2009
2012
Development
►
►
►
Acquisition of additional 3D seismic, construction of
necessary surface facilities
►
►
Intensive appraisal program of existing discoveries to
increase the reserve base in Tal block
Continue production via Central Processing Facility with
a planned daily production capacity of 270-300 MMscfpd
gas and 5,500-6,000 boepd condensate in Tal block
►
Early production from new discoveries
►
1-2 exploration wells annually
►
Peak production expected in 2015
9
MOL’s achievements in Pakistan
Branch Office founded
with 7 employees
and 2 expats
Branch Office total
employees
368 out of which 21 expats
Award date
of TAL Block
Manzalai D&P lease
Makori EPF
(Makori Plant)
Manzalai EPF
(Gurguri Gas
Plant)
1999
2000
2001
2002
Manzalai
discovery
2003
Makori D&P lease
2004
2005
2006
Makori
discovery
Award date
of MARGALA Blocks
Manzalai CPF
2007
2008
Mami Khel
discovery
2009
2010
Maramzai
discovery
Award date
of KARAK Block
10
Intensive simultaneous exploration, appraisal and development activity
Exploration in difficult area
Solutions provided by MOL
►
Himalayan fold/thrust belt with complicated structures
►
Combined surface geological survey and seismic investigation
►
2 major and thick detachments
►
Advanced processing and modelling techniques
►
Surface and deep structures not conformable
►
Special drilling recipe
►
Technically difficult seismic and drilling
►
Acid treatment of fractured reservoirs
►
Unsuccessful trials before MOL exploration: 3 dry wells
►
11 of 15 wells are successful
Fully controlled exploration @
appraisal @ field development Ö
production
Hydrocarbon play of Manzalai prospect
N
KAHI
TWT (S)Kurram
nappe
0-
S
AHMAD ZAI
Kitchen
Paleogene nappe
Seeps
Paleogene nappe
Karak Karak
fault S eepsfault II
12-
SR
Kitchen mature too early
SR
3-
SR
SR
4-
SR
SR
Pcm detachment
5 km
11
MOL geological model:
a value creating step towards the big exploration success
Previous AMOCO interpretation
N
Mami Khel anticline
Manzalai anticline
S
Current MOL interpretation
N
Mami Khel anticline
Gas discovery
Manzalai anticline
Gas discovery
Final consequence:
Several gas and condensate discoveries in an area left by
previous operators
S
AMOCO model:
► All structures concentric
► All structures induced by strike slip flower
structures
Consequences:
► Lower target at same place as surface
anticline
► Only vertical migration was interpreted
► Small fragmented traps were mapped
MOL model:
► All structures detached from surface by thick
shales
► All structures induced by flat thrusting
► Surface and deep structures at different
locations
Consequences:
► Lower target at different place as surface
anticline
► Mainly lateral migration along thrust sheet
► Bigger traps as major thrust sheets
Previous and future E&P activities in TAL Block (1999-2012)
Future exploration & appraisal
2010-2012
Operation highlights
1999-2010
►
►
►
►
►
►
►
Reprocessed thousands km of old
seismic
Acquired 1500 km new 2D seismic
Acquired 2000 sqkm 3D seismic
Drilled 7 wildcat wells, out of which 4
proved to be discovery
Drilled 3 appraisal wells
Put into Early Production Manzalai-1
well in 2005 and Makori-1well in
2006
Early Production of MamiKhel-1 and
Maramzai-1 expected by end 2010
►
►
►
Future exploration focuses on structural
stacks between the major antiforms, or
subthrust plays
Drilling of 2 appraisal wells based on
the recently acquired 3D seismic
Drilling of 3 new exploration wells on
remaining potential targets
Installation of a new 150 MMscfd
capacity processing train at CPF
having suitable technology to process
Makori rich gas, and drilling of 4 new
development wells
Current field development &
production
Manzalai EWT (Gurguri) Gas Plant
► Operating since Jan 2005
► Production capacity: 50 MMcf/d gas
and 500 bbl/d condensate
Makori EPF Gas Plant
► Operating since Jan 2006
Manzalai CPF
► Inaugurated on 11 Nov 2009
Manzalai EWT
Makori D&P
Manzalai D&P
Acquired 1500 km new 2D 1999-2000
Acquired 2000 sqkm 3D 1999-2000
Exploration wells drilled 1999-2000
Manzalai-1
Makori EPF
Appraisal wells drilled 1999-2000
Planned appraisal wells 2010-2012
Manzalai CPF
Planned exploration wells 2010-2012
Planned development wells 2010-2012
Local market environment and sales possibilities in Pakistan
►
Well defined regulatory framework
►
►
Petroleum Laws, Rules & Policies
►
Model Agreements – PCAs, GPAs, GSAs etc
Well developed market
►
ARL
Morgah
PARCO
Multan
►
►
►
►
L
NR chi
ra
Ka
Ka PR
ra L
ch
i
►
MPNR & its Directorates provides only „one window”
for operations
No any problem of the payments for sold gas and
condensates guaranteed by the Pakistani
Government
Import substitution at much lesser rate
Transmission & distribution network across the
country
Model Agreements – PCAs, GPAs, GSAs etc
Market for Hydrocarbons
►
or
sic
Bo achi
Kar
►
Gas purchase is guaranteed by the Pakistani
Government
MOL Pakistan designated buyers:
►
gas – SNGPL
►
crude/condensate - ARL
14
Effective management of the political and security risks based on our
Pakistani operation
Foreign companies carry out their risk assessment by outsourced
consultants in Pakistan
Security concerns
►
►
►
►
►
Government of Pakistan is the guarantor
for creating a conducive security
environment for E&P companies
In most areas the writ of the government
appears to be limited i.e. Baluchistan &
NWFP/FATA
Delay of Government’s immediate & full
support in case of emergency situation
Coercion by tribal chiefs/elders which is a
source of concern to the companies
Political interferences and reactions by
locals
Security measures in fields
►
►
Security measures
at MOL Office Islamabad
Security infrastructure
Total: 534
►
►
►
►
►
Police: 38
Frontier Constabulary (FC): 238
FC Guards: 209
Local Guards: 56
Office security (DSS): 50
Usage of Security Forces
Police, Frontier Constabulary (FC),
FC Guards, Local Guards
Additional Security Measures in Place:
► Travel
security
Procedure,
Perimeter wall, Watch Towers,
Security Lights, Labors and third
party Employees verification, Police
Piquet, Ground Hurdles, Vehicle
Control, Security and Emergency
Plans, Hill Piquet, CCTV Cameras,
Sniffer Dogs, IP Cameras
►
►
►
►
Guards, Scanner, Walkthrough Gates,
Personal Search/Items Search, Docking
system doors
Access Control through
readers/Proximity cards
CCTV cameras & Visitors Procedure
15
KAZAKHSTAN
16
Kazakhstan – putting into production our recent discovery
Key facts (2009)
►
Successful testing of appraisal well proving significance of
discovery
►
As a result of the successful exploration activities, MEMR
approved the extension of the Exploration Licence for appraisal
of Rozhkovsky area for 4 years period (May 11, 2010 – May 11,
2014), evaluating of the commercial significance of the field and
for further exploration activity for the remaining area of the block
►
MOL has acquired 22.5% in 2004 and an additional 5% in 2005
in the Fedorovsky block, thus MOL has 27.5% participating
interest in the project
►
development and appraisal
activities
►
potential targeted
CAPEX share
2010-12
Exploration
Development
►
USD 20 million appraisal CAPEX
►
►
Drilling of 3 appraisal wells
►
Start-up of trial production
►
Detailed interpretation of geological data to assess
further exploration potential
►
FEED study
►
Peak production expected in 2018
17
Fedorovskoye Block, Exploration in Kazakhstan
OPERATION HIGHLIGHTS (2004-2010)
►
►
MOL entered into the 2nd Exploration Phase in 2004 with
interest of 22.5%
All Work Program commitments is fullfilled
9 Drilling of two exploration wells (Zhaik-U-1 and
Zharsuat-U-5) based on the old geological model of
the previous owners - dry
9 Re-entry and test of pre-contracted well
(Chinarevskoye-U-11) - unsuccessful due to
technical reasons
9 1000 sqkm 3D seismics initiated by MOL - a new
low-risk exploration model has been developed
9 A major discovery has been made in 2008 by the
RZK-U-10 exploration well and in 2009 by the RZKU-12 appraisal well proved multiple gas and
condensate reservoirs in the Rozhkovsky field
structure
FUTURE PLAN: DEVELOPMENT FOR EARLY PRODUCTION
►
►
►
►
The project concept has to focus both on drilling
appraisal wells and development for early production
phase to provide the necessary number of producing
wells
Drilling and testing three appraisal wells in 2010-2013,
drilling additional three wells are optional
Early Production Facility has to be implemented as a first
train of the final plant with gas marketing by pipeline,
LPG and condensate by truck transportation. First train
capacity is 1.5 MMm3 sales gas by 2012.
Completion of surface facilities, executing the early
production by 2013
18
Changing the original geological model with a new one has resulted a discovery
Old geological model
Classic
target
►
The block is inside the highly prolific
North Pre-Caspian petroleum
region
►
The deep central part of the
Precaspian Basin is surrounded by
Paleozoic carbonate shelfal
deposits
►
The main target was to test big
sized prospects, which could be
considered as perfect
Karachaganak analogues
(carbonate reef buildups)
Pre-Caspian Basin
Carbonate reef
buildups
►
Salt
dome
The first period of exploration
resulted two deep dry holes on
Zharsuat and Zhaik
MOL
interpretation
New geological model
►
Interpretation of new 3D seismic and merging of all
available data in the wider area opened the possibility
to find new exploration targets
►
Rozhkovsky discovery was made in classic four-dip
anticline
Rhozkovsky
discovery
Upside
potential
Old seismic interpretation
19
Transportation options for gas and condensate marketing
Atyrau-Samara
and UralskSamara
oil pipelines
►
►
Soyuz and
OrenburgNovopskov gas
pipelines
Condensate can be transported by trucks from the
field to Rastoshi, Aksay (railway loading terminal) or
Uralsk (oil terminal) refinery (100km). They have
export sales rights.
Gas can be delivered into the Soyuz (export sales)
and/or Orenburg-Novopskov (export and domestic
sales) pipeline. The gas also can be exported to
China with a swap transaction from 2015.
20
KURDISTAN, IRAQ
Dead oil seep in Bekhme Gorge
Gas sampling in Bekhme Gorge
Shaikan
Akri-Bijeel
Gas sampling in Gully Keer
Hydrocarbon flow
HC-filled Rudist
21
Kurdistan Region of Iraq – significant developments by investing into a
sizeable asset base
Key facts (2009)*
►
Acquisition of 10% in Pearl project
►
Significant discovery in Shaikan block
►
fast track field development and
►
CAPEX share
2010-12
Exploration
Development
►
►
►
Drilling of multiple exploration and appraisal wells
►
High impact drilling programs
►
Acquisition of additional 3D seismic
►
Construction of necessary surface facilities
*: production and reserves of non-consolidated projects are not highlighted
22
Intensive exploration, appraisal and development in Kurdistan from 2007
Pearl Company
Shaikan
Akri Bijeel
►
Acquisition of 10% in Pearl project in 2009
►
Khor Mor field - Appraisal and development phase
►
Chemchemal field – Exploration and appraisal phase
Photo Surface facilities
Pearl
Chemchemal
Khor Mor fields
Akri Bijeel Block
Shaikan Block
►
Effective date: 06 November 2007
►
Effective date: 06 November 2007
►
Gulf Keystone operated exploration with 20% MOL
(Kalegran Ltd) participation
►
MOL operated (80% share) exploration block with
participation of Gulf Keystone Petroleum Ltd.
►
2D seismic acquisition and drilling 1 exploration well
►
2D seismic acquisition and drilling 1 exploration well
►
Discovered field in 2010 is among the most significant
onshore fields of the region
►
1st exploration well seems to be successful, however
the testing is in progress
►
The three-year appraisal programme has been started
►
Subsequent program to be decided after results are
known
23
Not always the most obvious step is the best solution
Types of the prospects in Akri-Bijeel Block
►
Classic, well known surface anticline trend
►
►
►
Two large surface anticlines are mapped and can
be tested with future exploration wells
►
All three main anticlinal prospects should be tested
Other, more subtle plays should be also tested later, but
within 5 year exploration period
Hidden, subsurface anticline as a new prospect
►
►
Exploration strategy: to define full prospectivity of the Block
Not visible on surface, only on seismic section
lines
Bijeel-1 well: Test is in progress
Surface anticlines
Aq r
a an
ticlin
e
Be
ch
me
Bijeel-1 well
an
ti
clin
e
Hidden anticline
Recent discovery can prove the presence of commercial hydrocarbon reserves in Akri-Bijeel exploration area
and can verify MOL’s exploration conception first focusing on new ‘hidden’ structural prospect.
24
Marketing opportunities
Oil and condensate market
►
Presently oil is sold on the domestic market, at a depressed
price
►
Domestic demand is limited, in spite of ongoing construction
of refineries
►
Export is the viable solution on long term
►
The Kirkuk-Ceyhan oil pipeline has a maximum capacity of
1.6 Bbbl/d, out of which currently approx. 0.5 MMbbl is used
►
The decision on Kirkuk will be fundamental in respect of
export possibility, export is of the interest of both the
Kurdistan Region and the Federal Iraq
Akri-Bijeel
and
Shaikan
blocks
Gas market
►
Short term solution:
►
►
Sell the gas for two cement factories and two power
plants
Medium term solution:
►
Supply Turkish territories neighbouring Northern Iraq
with low energy supply
►
Join Nabucco: the connection between Turkish-KRI
border and the main pipeline would be part of the
Nabucco project
►
Additional possibilites: fulfil power generation
demand, regional gas supply for Syria, gas swap with
North-West Iran, supply of LNG plant in Ceyhan, join
the Arab Gas Pipeline, etc.
25
TO FIND HYDROCARBONS YOU NEED:
►
►
►
►
►
A competitive, balanced Portfolio
Competent people
Ideas turned to reality with expert and focused work
Continuous presence in target regions and in target disciplines
Exploration is not gambling
26
How can we repeat our success in INA Downstream?
Dr. Béla Kelemen
Vice President for Refining of MOL
May 27, 2010
Downstream - mixed but improving portfolio
Refineries
Danube
Capacity: 8.1 Mtpa
NCI: 10.6
Bratislava
Capacity: 6.1 Mtpa
NCI: 11.5
Mantova - IES
Capacity: 2.6 Mtpa
NCI: 8.4
Rijeka
Capacity: 4.5 Mtpa
NCI: 5.8
Sisak
Capacity: 2.2 Mtpa
NCI: 6.1
Refinery throughput: 22.9 Mt - 2010 E
5%
6%
4%
3%
9%
6%
Middle Distillates
21%
LPG
Motor Gasoline
Other chemical products
Bitumen
Naphta
Fuel Oil
Other
46%
2
Well known outstanding results of our key sites
Duna and Bratislava
refineries in top
performer position
since 2003
Downstream
Business of the
year 2008
Market driven
operation
25
Bratislava Refinery
15
Integrated
Optimization,
SCM philosophy
Danube Refinery
Success
Success
factors
factors
Asset development &
Technology
leadership
Operational
Excellence
5
Net cash margin 2008 (USD/bbl)
-5
3
Our new challenge
How can we implement it at INA DS ? Market
Market driven
driven
operation
operation
Integrated
Optimization,
SCM philosophy
Asset development &
Technology
leadership
Operational
Excellence
4
Strengthening further on a high growth market
Favourable demand prospects
One of the highest GDP growth potential in Europe
in mid-term
► Rapid growth of car penetration with long term
catch-up effect
►
SLO
Car penetration curve (2007)
H
CRO
Bosnia
BIH
Outstanding long term motor fuel consumption
compared to WE, even more favorable than CEE avr.:
► Increase in gasoline (1-2% CAGR)
► Strong diesel growth (3-4 CAGR)
► Control the most favorable Logistics network and cover
the whole region, which is the key to customers
► Unquestionably the most advanced knowledge among
regional players, which predestinates us to stand/win the
competition
►
SRB
MNE
KOS
Depots used by MOL Group for serve the S‐CEE market
ALB
5
Effective commercial with Group level synergies
Retail
►
Strengthened further on Core and Growth
markets with INA
►
Most significant FS network of the Southern
CEE – synergies of Group operation
►
1600+ Fuel Stations (FSs) in 11 countries
►
Strong captive market for refineries: 19%
►
Successful multi-brand strategy
Slovnaft Polska
Slovnaft Ceska
MK Mineralkontor
Slovnaft
MOL Austria
Roth Heizöle
MOL
MOL Romania
MOL Slovenija
INA
IES
Tifon
Energopetrol
Intermol d.o.o
Wholesale
►
Harmonized wholesale activity
►
Improved commercial technics using Group knowledge
X > 30%
►
Focus on high margin domestic markets
30 % > X > 10 %
►
Increase enduser sales to grab higher margin
10% > X
►
Prefer „one channel” export sales
Retail Market Share
6
Market environment forces us for further improvement
Growing demand for motor fuels, shrinking market
for black products
Stable growth of MOTOR FUEL
2-3%
-3-4
%
Falling FUEL OIL market
Tightening Regulation
EURO V Motor Fuel Specifications
Marine fuel specification
►
Ships in Emission Control Areas (ECA) have
to use fuels with less than 1,5 m/m% S, which
is planned to be reduced to
1 m/m% by 1 July 2010
0,1 m/m% by 1 January 2015
►
Mediterranean Sea
Unfavorable Price Environment for Fuel Oil
250
200
150
Diesel crack spr.
MOL
Delayed Coker
100
50
0
1999
-50
2001
2001
2008
2008
-100
2010
2012
2012
Fuel oil crack spr.
2020
2020
How
How to
to handle
handle
heavy
fuel
heavy fuel oil
oil in
in
long
term
and
long term and
make
make Rijeka
Rijeka
Refinery
Refinery more
more
profitable?
profitable?
-150
-200
-250
7
Market driven
operation
Integrated
Optimization,
SCM
philosophy
Asset
Asset development
development
&
& Technology
Technology
leadership
leadership
Operational
Excellence
8
Simplified refinery structure
Product
Product yield
yield mostly
mostly depends
depends on
on configuration
configuration
‘Typical refinery’
refinery’ structure
LPG
(4-5 %)
Gas treating
CRUDE
OIL
CHEMICAL
FEEDSTOCK
Naphtha
(8-15%)
Gasoline
reformulation
Gasoline
(30-40%)
Distillation
Desulfurisation
Kerosene
(5-8%)
TRANSPORT
FUELS
Diesel
Heating Oil
Vacuum
distillation
H2
Cracking
(30-40%)
Residue
Conversion
Fuel Oil
(0-20%)
OTHERS
(*)
Coke & Bitumen
(5-15%)
(*) HEATING, SOLID FUELS, LUBRICANTS, ASPHALTS, PACKAGING
9
Success story of MOL…
Key success factor: right investments with right technical scope in the right time
f
f
f
Provide product quality required by 100,0%
market and legislation (sulphur free 90,0%
80,0%
motorfuel, bio-content)
Meet increasingly stringent
environmental requirements (waste
water treatment, reduction of CO2,
SO2 NOx emission )
70,0%
Meet increasing gasoline and
distillate demand
20,0%
Others
Bitumen
Chem.o.p.
Base oil
Fuel oil
60,0%
50,0%
Gasoils
40,0%
30,0%
Jet
Gasoline
10,0%
Naphtha
0,0%
f
Phase out heavy fuel oil production
1965
LPG
1975
1985
1995
2005
2008
10
Success story of MOL…
and INA
Key success factor: right investments with right technical scope in the right time
►
Provide product quality required by
market and legislation (sulphur free
motorfuel, bio-content)
►
Meet increasingly stringent
environmental requirements (waste
water treatment, reduction of CO2,
SO2 NOx emission )
►
Meet increasing gasoline and
distillate demand
►
Phase out heavy fuel oil production
Phase I
Phase I
Product Quality Improvement
Product Quality Improvement
Comply with EU environmental Comply with EU environmental standards
standards
Phase II
Phase II
Deep Conversion –
Deep Conversion – Product Yield Product Yield Improvement
Improvement
11
Sisak modernization program – Current stage
Clean gasoline and partial transition to 10 ppm diesel
Coker
Coker Gasoil
Gasoil HDS
HDS unit:
unit:
revamp
revamp was
was completed
completed in
in
2007.
2007. Increase
Increase quality
quality of
of
gasoil.
gasoil.
PRODUCTS BLENDING
VACUUM
TOPPING
New
put on
on
New Claus
Claus plant:
plant: put
stream
stream in
in 2008.
2008. Reduce
Reduce
refinery
refinery emission.
emission. (SO2)
(SO2)
FCC-gasoline
FCC-gasoline HDS
HDS unit:
unit:
started
started up
up in
in 2009,
2009, produce
produce
low-sulphur
low-sulphur gasoline
gasoline
blending
blending component
component from
from
2010
2010
Isomerisation
Isomerisation unit:
unit:
completion
completion in
in 2H
2H 2010;
2010;
improve
improve gasoline
gasoline octane
octane
pool,
pool, low
low sulphur
sulphur gasoline
gasoline
component
component from
from end-2010
end-2010
12
Sisak modernization program – Current stage
Coker
Coker Gasoil
Gasoil HDS
HDS unit:
unit:
revamp
revamp was
was completed
completed in
in
2007.
2007. Increase
Increase quality
quality of
of
gasoil.
gasoil.
Current status
7%
3%
New
New Claus
Claus plant:
plant: put
put on
on
stream
in
2008.
Reduce
stream in 2008. Reduce
refinery
refinery emission.
emission. (SO2)
(SO2)
PRODUCTS BLENDING
TOPPING
24%
VACUUM
30%
FCC-gasoline
FCC-gasoline HDS
HDS unit:
unit:
started
started up
up in
in 2009,
2009, produce
produce
low-sulphur
low-sulphur gasoline
gasoline
blending
blending component
component from
from
2010
2010
36%
Middle Distillates
Motor Gasoline
LPG
Isomerisation
Isomerisation unit:
unit:
completion
completion in
in 2H
2H 2010;
2010;
improve
improve gasoline
gasoline octane
octane
pool,
pool, low
low sulphur
sulphur gasoline
gasoline
component
component from
from end-2010
end-2010
Naphta
Black prd. + Sulphur
13
Rijeka modernization program – Current Stage
Full 10 ppm diesel and gasoline production in H2
Full 10 ppm diesel and gasoline production in H2 2010
2010
FUEL GAS
MEROXLPG
i-PENTANE
n-HEXSANE
Light REF. to DIP
L. NAPHTHA
n-PENTANE
DEISOPENTANIZ
ER
H. NAPHTHA
MEROX
L.NAPHTHA
REFORMING
HDS
REFORMATE
SPLITTER
Light REF. to DIP
Heavy REF.
REFORMATE
HDS/MHC NAPHTHA
KEROSENE
JET FUEL
BENDER
LIGHT GAS OIL
LGO
HYDRODES. GAS OIL
HGO
HDS
CLAUS
SOUR GAS
LPG
MEROX LPG
FCC NAPHTA
RESIDUE
HC/HDS
VACUUM
DISTILLAT.
ISOMERISAT
E
ISOMERIZATION DIH
MHC
RESI
D.
VGO light
VGO heavy
H
2
CYCLE OIL
FLUIDCATALYTIC
CRACKING
DECANT OIL
VISBR. GASOLINE + GO
VISBREAKING RESIDUE
VISBREAKIN
G
VACUUM RESIDUE
HYDROGEN
PRODUCTION
MEROX FCC
GASOLINE
SULPHU
R
REFINERY PRODUCTS BLENDING
ATMOSPHERIC
ATMOSPHERIC DISTILLATION
LPG
Mild
Mild HCK
HCK complex
complex
(2,6
(2,6 MT/y)
MT/y)
Start-up:
Start-up: Q3
Q3 2010
2010
Euro
Euro VV gasoil
gasoil and
and
gasoline;
gasoline; FCC
FCC
debottlenecking
debottlenecking
Sulphur
Sulphur recovery
recovery unit
unit
(190
(190 t/d)
t/d)
Start
Start up:
up: in
in line
line with
with
MHC
MHC
Reduce
Reduce refinery
refinery
emission
emission (SO2)
(SO2)
New
New Hydrogen
Hydrogen
Generation
Generation unit
unit
(81
(81 th.
th. Nm3/h)
Nm3/h)
Start
in
Start up:
up:Elemental
in line
line with
with
MHC
MHC Sulphur
H2
H2 generation
generation for
for MHC
MHC
(Phase
(Phase I-II.)
I-II.)
14
Rijeka modernization program – Current Stage
Full 10 ppm diesel and gasoline production in H2
Full 10 ppm diesel and gasoline production in H2 2010
2010
FUEL GAS
Product yields – basis and after Phase 1 MEROXLPG
ATMOSPHERIC
L. NAPHTHA
22%
i-PENTANE
n-HEXSANE
Light REF. to DIP
n-PENTANE
DEISOPENTANIZ
7%
ER
4%
H. NAPHTHA
REFORMING
HDS
7%
REFORMATE
SPLITTER
Light REF. to DIP
1%
KEROSENE
JET FUEL
BENDER
LIGHT 26%
GAS OIL
27%
HDS
HGO
Heavy REF.
REFORMATE
HDS/MHC NAPHTHA
LGO
HYDRODES. GAS OIL
CLAUS
SOUR GAS
LPG
MEROX LPG
FCC NAPHTA
RESIDUE
VACUUM
DISTILLAT.
HC/HDS
MHC
RESI
D.
40%
VGO light
VGO heavy
H
2
MEROX FCC
GASOLINE
CYCLE OIL
FLUIDCATALYTIC
CRACKING
Middle Distillates
47%
DECANT OIL
Motor Gasoline
Naphta
VISBREAKING RESIDUE
VISBREAKIN
G
VACUUM RESIDUE
HYDROGEN
PRODUCTION
LPG
ISOMERISAT
E
ISOMERIZATION DIH
MEROX
L.NAPHTHA
19%
SULPHU
R
LPG
Mild
Mild HCK
HCK complex
complex
(2,6
(2,6 MT/y)
MT/y)
Start-up:
Start-up: Q3
Q3 2010
2010
Euro
Euro VV gasoil
gasoil and
and
gasoline;
gasoline; FCC
FCC
debottlenecking
debottlenecking
Sulphur
Sulphur recovery
recovery unit
unit
(190
(190 t/d)
t/d)
Start
Start up:
up: in
in line
line with
with
MHC
MHC
Reduce
Reduce refinery
refinery
emission
emission (SO2)
(SO2)
New
New Hydrogen
Hydrogen
Generation
Generation unit
unit
(81
(81 th.
th. Nm3/h)
Nm3/h)
Start
in
Start up:
up:Elemental
in line
line with
with
MHC
MHC Sulphur
H2
H2 generation
generation for
for MHC
MHC
(Phase
(Phase I-II.)
I-II.)
15
Further elevation - Sisak Refinery
►
Several options are under evaluation
to improve Sisak refinery asset,
including but not limited to the
increase of crude distillation unit
(CDU) capacity up till 3.5 Mtpa –
final decision will be harmonized
with other Group level investments
►
Full transition to Euro V diesel is a
key mid-term target
f
In short term we are focusing on rising profitability of existing assets through
improvement of operational availability and energy efficiency
f
Continuous operation - in Q1 2010 the longest uninterrupted operation since
several years
f
Exploitation of low investment – high return options
16
Further elevation with residue upgrade at Rijeka
Improve
Improve product
product yield
yield and
and profitability
profitability
RIJEKA
Transform
Transform high
high sulphur
sulphur
fuel
oil
to
valuable
fuel oil to valuable white
white
products
products
Technologies
Technologies under
under
investigations:
investigations:
•• Delayed
Delayed Coking
Coking
•• Residue
Residue Hydrocracking
Hydrocracking
RIJEKA Refinery
For
For both
both scenarios
scenarios there
there
are
proven
track
records
are proven track records
in
in MOL
MOL Group:
Group: DC
DC at
at
Danube,
Danube, RHC
RHC at
at Bratislava
Bratislava
Refinery
Refinery
17
Further elevation with Residue Upgrade at Rijeka
Eliminate cca. 1 Mt Fuel Oil from the production
FUEL GAS
MEROXLPG
i-PENTANE
n-HEXSANE
Light REF. to DIP
L. NAPHTHA
n-PENTANE
DEISOPENTANIZ
ER
H. NAPHTHA
MEROX
L.NAPHTHA
REFORMING
HDS
REFORMATE
SPLITTER
Light REF. to DIP
Heavy REF.
REFORMATE
HDS/MHC NAPHTHA
KEROSENE
JET FUEL
BENDER
LIGHT GAS OIL
LGO
HYDRODES. GAS OIL
HGO
HDS
CLAUS
SOUR GAS
LPG
MEROX LPG
FCC NAPHTA
RESIDUE
HC/HDS
VACUUM
DISTILLAT.
ISOMERISAT
E
ISOMERIZATION DIH
MHC
RESI
D.
VGO light
VGO heavy
H
2
CYCLE OIL
FLUIDCATALYTIC
CRACKING
DECANT OIL
MEROX FCC
GASOLINE
SULPHU
R
ATMOSPHERIC
LPG
Project
Project timing
timing
and
and exact
exact scope
scope
depend
depend on:
on:
•the
•the expected
expected
future
future of
of fuel
fuel oil
oil
(crack
(crack spread,
spread,
local
local demand)
demand)
•green
•green light
light of
of
authorities
authorities
VISBREAKING RESIDUE
VISBREAKING
VACUUM RESIDUE
RESIDUE
UPGRADING
HYDROGEN
PRODUCTION
18
Further elevation with Residue Upgrade at Rijeka
FUEL GAS
Product yields – before and
after residue upgrade
MEROXLPG
LPG
n-PENTANE
DEISOPENTANIZ
ER
L. NAPHTHA
7%
19%H. NAPHTHA
HDS
1%
MEROX
L.NAPHTHA
REFORMATE
SPLITTER
REFORMING
ISOMERISAT
E
ISOMERIZATION DIH
7%
Heavy REF.
2%
REFORMATE
HDS/MHC NAPHTHA
KEROSENE
JET FUEL
BENDER
LIGHT GAS OIL
LGO
26%
HDS
HGO
HYDRODES. GAS OIL
CLAUS
SOUR GAS
LPG
28%
SULPHU
R
MEROX LPG
FCC NAPHTA
RESIDUE
VACUUM
DISTILLAT.
HC/HDS
MHC
RESI
D.
VGO light
VGO heavy
H
47%
2
MEROX FCC
GASOLINE
CYCLE OIL
FLUIDCATALYTIC
CRACKING
Middle Distillates
Project
Project timing
timing
and
and exact
exact scope
scope
depend
depend on:
on:
7%
Light REF. to DIP
ATMOSPHERIC
i-PENTANE
n-HEXSANE
Light REF. to DIP
56%
•the
•the expected
expected
future
future of
of fuel
fuel oil
oil
(crack
(crack spread,
spread,
local
local demand)
demand)
•green
•green light
light of
of
authorities
authorities
DECANT OIL
Motor Gasoline
Naphta
VISBREAKING RESIDUE
VISBREAKING
VACUUM RESIDUE
RESIDUE
UPGRADING
LPG
HYDROGEN
PRODUCTION
19
Modernisation improve profitability on high extent
Up to the Q1 of European refineries
Up to the Q1 of European refineries
Parallel increase in Nelson
Complexity Index
Ri
jek
aw
Ri
jek ith M
a2
HC
00
8
NCM in USD/bbl
15
Indicative position of Rijeka Refinery on European NCM ranking
re Rije
sid ka
ue af
up t er
gr
ad
e
25
10+
8+
5.8
after residue
upgrade
with MHC
basis
5
-5
20
Market driven
operation
Integrated
Optimization,
SCM philosophy
Asset development
& Technology
leadership
Operational
Operational
Excellence
Excellence
21
Make the operation as efficient as possible
Right
Right technology
technology is
is not
not enough:
enough: proper
proper operation
operation is
is aa continuous
continuous
challenge
challenge for
for INA
INA refineries
refineries –– supported
supported by
by MOL’s
MOL’s knowledge
knowledge
Minimize
Minimize unplanned
unplanned shutdowns
shutdowns
Save
Save energy,
energy, save
save hydrocarbons
hydrocarbons
(keep
the
eyes
(keep the eyes on
on refinery
refinery losses)
losses)
Cost
Cost cutting
cutting -- Control
Control on
on spendings
spendings
Motivate
Motivate the
the employees
employees for
for savings
savings
Use
Use MOL’s
MOL’s Experiences/BATs
Experiences/BATs on
on
Operation
and
Maintenance
as
well
Operation and Maintenance as well (e.g.
(e.g.
Operator
Operator Training
Training System)
System)
Complex
Complex Group
Group level
level Energy
Energy
Conservation
Program
along
Conservation Program along the
the 33
pillars
(Volume/Price/Optimization)
pillars (Volume/Price/Optimization)
Implement
Implement strict
strict control
control system
system
e.g.
e.g. EIFFEL
EIFFEL program
program
Special
Special efficiency
efficiency target
target in
in money
money
terms
terms
Clear,
Clear, strictly
strictly followed
followed KPI
KPI system
system
Key
Key factor:
factor: good
good housekeeping
housekeeping
behavior
behavior
Slow,
Slow, conscious
conscious process,
process, supported
supported by
by
some
some cutting
cutting edge
edge tools,
tools, but
but its
its
generally
generally about
about people’s
people’s behavior
behavior
22
Invest a lot…into Human Capital as well
Challenges of INA
►
►
►
►
►
Experience of SN
15 years no investment – disruption of
knowledge
Being on a very different level
► e.g.– 7 employees was under age 30
from 870 at RR…
Fire fighting vs. long term solutions
Motivate colleagues
‘Balancing’ between help and force
►
Find the best organizational structure to
cooperation
►
Avoid ‘we know the best’ and ‘we used to
do 20 years’ behavior
►
Share and not only transfer Best
Available Technologies
►
Cooperation is needed on lower level
•• Careful
Careful examination
examination of
of the
the local
local situation
situation
•• Common
Common organizational
organizational structure
structure
•• Create
Create ‘One
‘One Family’
Family’ atmosphere
atmosphere
•• Prompt
Prompt start
start of
of Exchange
Exchange and
and Succession
Succession
Programs
Programs
•• International
International rotation
rotation –– learn
learn and
and ‘teach’
‘teach’
•• Standardization
Standardization but
but on
on aa rational
rational way
way
Full integration and
gradual change in
people’s mind can
not be done till
tomorrow…it takes
years, but can be
shortened in some
fields
23
Market driven
operation
Integrated
Integrated
Optimization,
Optimization,
SCM
SCM
philosophy
philosophy
Asset development &
Technology
leadership
Operational
Excellence
24
Supply Chain Management – an integrated concept
Philosophy
f
Integrate vertical structures (and mentalities) to achieve
truly multilateral SCM behaviour for maximized result
f
Backbone of the information flow vs. network of bilateral
communication
Refining
& Marketing
Suppl
y
Refining
Petrochemials
Logistic
s
Commercial
Production
Sales
Supply Chain Management
Use best-in-class optimization software tailored for the
processing industry. Principles:
f
7 plants are handled in the modelling process as
operational, not legal entities
f
Objective function is maximized
on Group level, not on particular entities
f
Cca. 50000 variables/cells in the matrix
- advanced mathematics for LP model
Handle all the time horizons
Strategic
Planning
Top Down
Planning
3+ yr
3 yr
Strategic
decisions
Target
setting
Rolling
Planning
Business
Planning
3-6 m
1 yr
Detailed
Money
target setting making
Operational
Scheduling
week/day
Execution
25
Managing bottlenecks for the highest result
Crude
Supply
Crude
Depots
Refining
Primary
Distribution
Product
Depots
Secondary
Distribution
Market
Business issues
- Crude supply trade
- Optimal stored volume
- Seasonal and business
fluctuations
- Adjusting output to
market demands
- Quality as a must
-Environmental issues
- Regular planned
shutdowns
- Optimal logistic solutions
- Optimal logistic capacities,
- Seasonal fluctuations in activity
- Regular maintenance
shutdowns
- Secure supply
of market points
- Clear market
concept and actions
„Business as usual” problems
Crude supply
- Supply disruption due to
mechanical malfunction
- Fluctuation in supply due
to other circumstances
- Managing disruption in
crude process
Refining
- Unplanned shutdowns
(multiple problems due
to interdependency)
- Inventory
management, hedging
Logistics
- Breakdown in facilities
(accident, malfunction)
- Non-mechanical disruption
(high tide on rivers, railway
strike, bad weather)
Commercial
- Unexpected fixed
order refusals
- Spot orders
fluctuations
- Quick changes in
market demand
26
Supply Chain Management at work – the key for synergy
exploitation
CASE STUDY 1 : 15-day unplanned shutdown of RHC unit in BR
o due to quick response security of supplying the market was
not endangered at all
o by exploiting synergies financial effect was limited to cca. USD
4.8 mn instead of cca. USD 25 mn (shutdown of the refinery)
CASE STUDY 2: 16 days unplanned shutdown of AV3 unit in DR
o due to quick response security
of supplying
Bratislava
Refinery the market was not
endangered
o by exploiting synergies financial effect was limited to cca. USD 2.8
mn instead of cca. USD 10.8 mn
Duna Refinery
Sisak Refinery
Mantova Refinery
CASE STUDY 3: Lack of Rail Tank Cars (RTC) in Hungary
Rijeka
o due to the extra mechanical examinations
of the RTCs
o 100 RTC were rescheduled fromRefinery
SN to MOL: financial effect was
completely eliminated instead of cca. 5.85 USD mn margin loss
(due to the unsatisfied market demands)
CASE STUDY 4: MOL partially replaces its high sulphur gasoil purchase from Russia with INA products
o re-optimize sales, purchases and free capacities on Group level
o MOL take over 8-10 kt high sulphur gasoil by month from Sisak for desulphurization: reduce
Russian raw material import, reduce INA’s bulk see sales: gain cca. USD 1.5 mn on Group level
27
Leveraging Synergies of 5 Refineries & 2 Petchem Units
►
Optimized asset development programs
►
Joint supply chain management
►
Joint stocking and shutdown scheduling
►
Increased asset utilization
►
Integrated logistic infrastructure
►
Feedstock and product transfer
Bratislava Refinery
Danube Refinery
optimization
►
Harmonized commercial activity
►
Harmonized non-HC procurement
►
Increased purchasing power
►
Group level risk management
►
Streamlined credit management
Sisak Refinery
Mantova Refinery
Rijeka Refinery
28
Summary
Improvement of INA DS along the 4 proven success factors…
Improvement of INA DS along the 4 proven success factors…
250
2 ‐3 %
200
150
100
50
0
1999
-50
-100
-150
2001
‐ 3‐ 4
2008
2010
2012
2020
7%
4%
22%
%
-200
-250
27%
Market driven operation
Refinin
g
&
Market
ing
S
u
p
p
ly
Refi
ning
Lo
gis
tic
s
Petroch
emials
Com
merci
al
Product
ion
Sal
es
Integrated Optimization, SCM philosophy
40%
Asset development & Technology leadership
7%
7%
2%
Supply Chain Management
Operational Excellence 28%
56%
…supports
…supports to
to become the Premium Refinery Group by 2012
become the Premium Refinery Group by 2012
29
Efficiency Improvement Opportunities in INA R&M
Division
Peter Chmurčiak
Executive Director for Refining and Marketing of INA
May 27, 2010
Extending Outstanding Operational Excellence to Group Level
Refining
•
•
•
•
Yield and margin improvement
Energy optimization
Capacity debottlenecking
Loss reduction
Logistics
• Depot optimization
• Increase asset
utilization
• Optimize delivery
Commercial
Retail
• Capture market improvement
potential
• Sales channel optimization /
harmonization
• Best Practice/Know-how transfer
• Portfolio optimization
• Increase non-fuel
revenues
• Improve overall
efficiency of
operations
Other
SCM
• Crude blend optimization
• Product portfolio rationalization
• Multi refinery regional supply chain optimization
• Joint procurement
• Maintenance harmonization
• Enhancement of technology
related IS systems
Structure of EBITDA improvement
Annual efficiency
improvement in 2012 vs
2009: USD 160 mn EBITDA
Cost
reduction
49%
51
Revenue
improvement
51%
2
Refining – Energy management to improve cost efficiency
Actions
Own consumption
►
►
►
►
►
Results / Target
Daily monitoring and optimization of heaters and
boilers operation
Heat exchanger fouling monitoring and reduction (on
line cleaning on bigger heaters)
Regular steam leaking and insulation condition
monitoring and maintenance
Utilization of waste heat boiler on CDU
Other (let down station reduction…)
►
Inventors installation
Power generators start-up
Connection to 110 kV network (instead 35 KV) in
Rijeka refinery
Installation of compensators for reactive energy in
Sisak refinery
►
►
►
►
►
Improved heater and steam
boiler efficiency
Better heat recovery and lower
fuel/water/electricity
consumption
Reducing of steam production
Lower fuels consumption
Reduced emissions and
improved air quality
Electricity consumption
►
►
►
►
►
Reduction of electricity costs
Reduce the ratio of purchased
(more expensive) electricity
Water consumption
►
►
►
Tap water management
Process water management - leaking prevention, water
reuse, concentration cycle increase, cooling tower
efficiency increase
Waste water treatment improvements
►
►
►
Lower cost for water
Lower fees and taxes payments,
better yields of LPG, chemicals
consumption reduction
Improvement on water quality
3
Refining – Production excellence and operational management to
improve refinery margins
Actions
Production
improvements
►
►
►
►
►
►
►
►
►
►
Refinery Modernization
►
►
►
Losses management
Utilization assets within MOL Group companies
(Maziva Rijeka equipment utilization, spent catalyst
usage between MOL Group companies etc)
Units debottlenecking (e.g. HDS and LCGO
hydrotreater in Sisak refinery…)
Flexibility of CDU capacity to enable continuous
operations
Regular production materials cost monitoring and
optimizing
Biofuels introduction activities
Results / Target
►
►
►
►
►
Phase 1: Hydro cracker in Rijeka, and Isomerisation in
Sisak in finalization phase
Finalization of preparation for Phase 2
Finalization of projects related to modernization in
Rijeka and Sisak (NG pipeline, PSA unit, DDCS..)
Put in order existing measuring devices and
installation of new ones
Daily material balance project in INA Refining
Implement MOL methodology for loss management
Recognize of till today undefined losses in refining
Monitoring and preventing of flaring
►
►
►
►
►
►
►
Reduction of production cost
within INA d.d.. and on MOL
Group level
Increasing of production value
through improved products
slate
Stricter cost control
Reach target for biofuels ratio
in INA products portfolio
Production of Euro V quality
products
SO2 emissions reduction
Increasing production of
“white” products
Exploiting advantages of
Rijeka refinery location
Measurement is the first step
for control
Focus on material balance
Work out and implement
actions for loss reduction
Reduce losses on flares (as
one of key element)
4
Focus on optimization and assets utilization in Logistics
Results / Target
Actions
Depot
►
Secondary Distribution
- assets
Rationalization of existing depot structure. Focus
on depots with
►
Lower unit costs
►
High turnover
►
Strategic location
►
Low investment need
►
►
►
►
►
Optimization/Scheduling
►
►
►
►
►
►
Increase the utilization of own RTC’s
Stop usage of small trucks
Reduced maintenance costs
Renegotiate contracts with external
contractors
Improve loss control at delivery
►
Better scheduling with using ORTEC software
Improved tracking of stocks on petrol stations
Optimized supply routes to petrol stations
Re-optimize vessel scheduling
►
►
►
►
Reduce storage cost
Own key assets as
competitive advantage
Reduce secondary distribution
costs
Cost efficient and high quality
services of external contractors
Reduce distribution cost
Increase utilization of own tank car
fleet
Decrease stand by cost of vessels
5
Advanced Commercial efforts to extend the market
Actions
Commercial techniques ► Euro V implementation in INA retail/wholesale Æ
expansion on Bosnian and other regional markets
– captured market
► ‘Win-win’ relationship Customer-Supplier
► ‘one2one’ relationship Customer-Supplier
► Sales representative’s mobilization and education
Sales channel
optimization /
harmonization
Best Practice/Knowhow transfer
Strategy revision (incl. Sea sales)
► Improve segmentation
► Harmonizing INA subsidiaries activities (within Ina
and MOL Group as well)
► Organizational structure, supporting efficient
commercial activities
►
Results / Target
► Expansion on BIH and other
regional markets as quality leader
► Increase captured market
► Achieve optimal production
planning
► Improve market knowledge by
dedicate sales representatives
► More effective pricing /
discount policy
► Increase direct sales to endusers
► Focused valuable services of
segments
Share Knowledge / Experience within MOL Group on fields of…
→ customers segmentation
→ direct supply to end users
→ effective credit management
→ value added services/competitive prices
→ best practices in sales representatives education
6
Priorities in overall Retail value building - Key actions I.
Actions
Network Optimization/
Development
►
►
Operations Efficiency
Improvement
►
Site P&L based planning and
performance management
►
Network development is carried
out based on a network
optimization plan
►
Optimization of working hours and opening times of
filling stations based on commercial data
►
Optimized FTE level in the
network
►
Rationalization of network operation costs
Unify site-level IT system portfolio
►
►
Introduce new sales management organization
following MOL Group practice (back-office, frontoffice)
►
Operational costs closer to
internal MOL group benchmark
Efficient sales management
organization
►
Implement new competitive fuel cards sales policy
Launch active sales of INA card products
►
New portfolio elements are introduced to react on
market needs
►
►
Fuel Card Solution
Development
Establishing cost-base for site-by-site evaluation and
optimization
Implement network optimization plan (value adding
investments, refurbishments and tail-end
rationalization
Results / Target
►
►
Increase sales volume through
fuel cards – ‘captive market’
INA fuel proactive sales activity
supported by direct marketing
tools and combined with loyalty
actions
7
Priorities in overall Retail value building - Key actions II.
Actions
Products & Services
Development
Contracting of shop suppliers with applying standard
contract methodology
Introduction of consignment sales model
►
Solid contractual basis for
cooperation with suppliers
►
Optimize working capital
Pricing optimization of shop products
Implement micro-market fuel pricing
►
Roll-out category management concept to the corenetwork
Improve and create a competitive gastro offer at INA
stations
►
Differentiated shop and fuel
pricing across entire network
Category management
concept applied
►
Profitable gastro segment
operated in harmony with
overall MOL group gastro
concept
►
Strengthening of loyalty activities / Best Customer
Loyalty Campaigns (BCLC)
►
►
►
Create long-term loyalty scheme for INA
Establish joint promotional practice with brandowners and suppliers
Trigger higher customer
engagement and increase
loyalty
►
►
Marketing activities supporting fuel sales
►
Establish a multi-partner
scheme for INA customers
Strengthening synergic
effects with suppliers
►
►
►
►
►
►
Marketing and Loyalty
Development
Results / Target
8
Supply chain opportunities
Actions
Crude purchasing
and blending
Product portfolio
rationalization
Results / Target
►
Usage of Spiral Crude Manager with over 850+
crude
►
Better crude evaluation/optimization
in order to increase refinery margin
►
Azeri Lt., Es Sider & others considered - usage
of light/sweet crude oils
►
Ensuring better yields, Euro V
products, continuous work of Sisak
refinery and reduced environmental
issues
►
Rollout of Euro V by July 1
►
►
Reducing number of products (elimination of
Leaded 98 gasoline in Sisak
►
Significantly better inventory
management
Reduced product storage &
handling costs
Higher flexibility of refinery
operations
Enhanced optimization – one
refinery in 2 locations concept
Better competitiveness
►
►
Regional SCM
approach
►
Synergies with MOL Group using 7 plant
model (XPIMS)
►
INA collaboration with synergies to improve
performance
►
►
Crude, feed stocks, blending
component transfers
►
Improved capacity utilization
►
Improving unit processing and
blending optimization
►
R&M margin improvement
Inventory management
►
Orion Scheduling and Blending Project
►
Optimize finished and feedstock inventory
9
HSE System overview
Actions and result
Evolving HSE culture
►
►
►
Law regulation
compliance
►
►
►
►
►
►
Improved internal
requirements
►
►
►
Process improvement
►
►
►
►
Full Management and employees commitment towards HSE
Incident reporting and investigation system implementation ongoing
HSE KPI based reporting system under preparation
Meet continuously tightening regulations
IPPC - situation analysis of existing installations and study of harmonizing preparation
underway
SEVESO II directive - Safety reports prepared and under approval
REACH obligations fulfillment ongoing
CO2 monitoring started as part of preparation activities for EU Emission Trading Scheme
Volatile Organic Compounds directive and Large Combustion Plant directive – project
plans under preparation
HSE Policy issued, prepared HSE Management System
Yearly targets and objectives prepared
Implementation of continuous trainings and competence towards creating more
proactive and generative HSE culture
Improve relations/acknowledgement of local community
Communication improvement (tool-box meetings, alerts)
Dispatching centre, supervisory and preparedness teams
Working instructions, alarm plans, technology adjustments
10
Additional to contribute INA R&M excellence…
►
►
►
People and
organization
►
►
►
►
►
►
Business
processes
►
►
►
►
►
External
environment
►
►
Improve organizational commitment and enthusiasm
Investments in skills and capabilities
Cascade the learning throughout the organization
Knowledge sharing through Exchange Programs within MOL Group
Process excellence development at a tactical and operational level
Teach strong leadership
Performance Monitoring System implementation / KPIs to reward contribution
Aligning organizational structure with MOL Group with adjustments to local diversity
Procurement management on MOL Group ensuring group benefits and higher purchasing power
INA R&M ideas followed by IS activities
Improved maintenance planning and execution to minimize number of days out of stream
Developing human capital strategy
Redefinition of processes and procedures for enabling more efficient operations
Efficiency Improvement Project - tool for developing and monitoring of ideas
Improve cooperation with local communities
Closely monitor activities for EU entering and potential impact
11
Summary
Efficiency
Efficiency Improvement
Improvement Opportunities,
Opportunities, Business
Business and
and Peoples
Peoples are
are
Interconnected
Interconnected
Energy
management
Optimization
and assets
utilization
Production
excellence
Retail value
building
Advanced
commercial
serves the market,
Supply chain
opportunities
Safe and
reliable
operations
External environment
People and
organization
Business processes
12
Financial outlook of MOL Group and
financial position of INA Group
József Molnár
Group CFO of MOL
May 27, 2010
Overview of MOL Group’s business
INTEGRATED
BUSINESS MODEL
f Integrated business made MOL more recession resilient
f Increasing integration by gaining operational control over INA
f Integrated supply chain optimization
FAVOURABLE
MARKET POSITION
f MOL’s core region is balanced in gasoline and short in diesel
f Strong position in a landlocked market
f Extended logistic system – diversified crude supply
LEADERSHIP IN
EFFICIENCY AND
PROFITABILITY
f Upstream has one of the lowest lifting cost among the European E&P players
f Duna and Bratislava refineries in top performer position since 2003
f Extending MOL’s efficiency level to Group level
PRUDENT FINANCIAL
RISK PROFILE
f On long-term natural hedged FX exposure
f Prudent Net Debt / EBITDA below 2
f Strong liquidity
EXPERIENCED
MANAGEMENT WITH
TRACK RECORD IN
INTEGRATION
f Stable management
f Track record in integration
f Experience in cost efficiency decisions
3
Slow recovery from the recession
Average
2005-09
2009
2010E
2011E
2012E
70.2
61.7
70
80
90
2.7
0.77
1.5
1.75
2
Crack spread – premium unleaded/gasoline (USD/t) FOB ROTT
122.1
112.5
90
75
60
Crack spread – gas oil/diesel (USD/t) FOB ROTT
129.8
68.3
95
120
140
50.4
48.6
30
25
20
Integrated petrochemical margin (EUR/t)
419.6
304
402
480
541
HUF/USD average
193.6
202.3
188
186
179
Main external parameters
Brent dated (USD/bbl)
Brent-Ural spread
Crack spread – naphtha (USD/t) FOB MED
f Moderate increase in oil price
f Higher gas oil crack spread and lower gasoline crack spread in line with higher demand expectations
f Stable HUF vs. USD
4
Existing portfolio has significant EBITDA generation potential
MOL Group EBITDA (USD bn)
Upstream
► Focusing on key cash generation development projects
5,0
► Increase production to 140-145 Mboe/d
► Exploration to further increase the reserve base
4,0
Downstream
► Become the most efficient downstream group in Europe
3,0
► Group level optimisation of upgrade projects
► Joint optimisation of 5 refineries and 2 petchem units
2,0
► Efficient retail to ensure captive market for refining
Other energy
1,0
► Gas storage operation providing stable cash flow
► Focus on TPP revamp as first experience in power
0,0
business
Gas transmission
-1,0
2009*
Upstream
Gas transmission
2012
Downstream
Other energy
Petchem
C&O and Intersegment
► Became a regional hub with connection to neighbouring
countries
► Double transit volume
EBITDA capacity 2012: USD 4.1 bn
* Excluding special items
5
Disciplined CAPEX program
2010-12 CAPEX plan by segments
Upstream – USD 2.6 bn
► Focus on high return development projects
► Conventional and unconventional exploration targeting
9%
significant resource base
4%
► Key regions: Syria, Hungary, Kurdistan, Croatia and
Russia
3%
43%
9%
Downstream – USD 2.0 bn
► Group level optimisation of refinery upgrade projects
► Top priority objective is to elevate INA refineries’
performance to MOL superior DS performance
Petrochemicals – USD 0.3 bn
32%
► Focus on maintenance and sustain safe operation
Upstream
Gas transmission
Petchem
Other energy – USD 0.2 bn
Downstream
Other energy
Other
► Revamp of Slovnaft TPP
Gas transmission – USD 0.6 bn
► Croatian-Hungarian interconnection
USD 6.2 bn CAPEX plan for 2010-12 dedicated to normal operation
Potential to grab further growth projects depending on cash flow generation
6
2009 - Resilient earnings and significant covenant headroom
EBITDA
Total Debt/Total Assets
USD mn
3,000
2,500
2,000
1,500
2,144
2,577
2,699
2,044
2,312
1,000
500
0
2005
2006
2007
2008
2009
35%
30%
25%
20%
15%
10%
5%
0%
19%
10%
26%
31%
26%
2005
2006
2007
2008
2009
Tangible Net Worth
Net Debt/EBITDA
1,600
1,400
3,0
1,200
2,5
HUF BN
1,000
800
999
1,179
808
1,040
1,528
600
2,0
1,5
1,0
400
0,5
200
0.89
-0.35
1.02
1.96
1.66
2005
2006
2007
2008
2009
0,0
0
2005
2006
2007
2008
2009
-0,5
-1,0
Source: MOL
7
Well balanced funding portfolio targets further diversification
Committed funding portfolio (facilities)
f 4 syndicated revolving loan facilities (EUR 3.8 Bn)
Syndicated loans f 2015 and 2017 Eurobond (EUR 750 mn each)
Bond
f Magnolia hybrid (EUR 610 mn) with step-up in 2016
Bilateral
f Significant headroom available Only unused medium term facilities are
Hybrid
up for refinancing until 2012
Maturity Profile of outstanding debt
EUR m
2,000
1,059
1,500
819
373
1,000
29
33
29
500
1,008
968
800
706
750
750
610
19
107
0
2010
2011
33
2012
2013
Available cash & cash equivalents
Short term loan outstanding
Medium term loan outstanding
Undrawn maturing facilities
2014
2015
Hybrid
2016
2017
Eurobond
Long term (EBRD) loan outstanding
As of 31 March, 2010, MOL owned 7.1% treasury shares.
8
MOL Group liquidity under the loan agreements
MOL Group Long term debt and available cash
4,000
3,470
3,500
3,221
3,000
EUR mn
2,500
2,341
2,146
2,000
1,667
1,582 1,565
1,000
500
769
1,604
1,452
1,500
839
750
682
512
254
0
2005
2006
Cash and Cash equivalents
2007
Undrawn Amounts
2008
2009
Drawn Amounts
Key financing tasks ahead
►
Maintaining financial flexibility and headroom
►
Diversification of funding sources
► Enhancement of the maturity profile
► Safe and smooth refinancing process
► Optimization of the financing cost
9
INA’s financial position
Capital expenditure (HRK bn)
EBITDA (HRK bn)
5,0
4.0
4,0
3.3
3.0
3,0
5
4.4
3.6
4.5
4
2.5
3.4
3.0
2.9
2006
2007
3
2.1
2,0
2
1,0
1
0,0
0
2005
2006
2007
2008
2009
2005
10
2,5
7.1
2,0
4.9
1,5
3.9
4
1,0
2.2
2
0,5
0
0,0
2005
2006
2007
2010 E
3,0
8.5
6
2009
Overdue liabilities towards the State (HRK bn)
Total debt (HRK bn)
8
2008
2008
2009
2.2
1.5
'Nov
2009
End of
2009
1.3
Jan
1.3
Feb
0.8
0.7
Mar
Apr
2010 CAPEX should be fully financed by EBITDA
10
INA’s results improve continuously
Operating profit excl. special items (HRK mn)
1 500
► Strong improvement in Upstream in line with
recovery in oil price and increasing
1 000
production. Further improvement is expected
74
500
783
-500
-120
-4
-179
Discontinued
C&O
512
Retail
-22
-174
-263
-222
-172
-359
in line with growing production.
1175
12
396
0
1047
-224
-103
-39
-244
-118
-42
-200
R&M
-224
-199
E&P
continuing
2009 Q4
2010 Q1
► Weak Downstream result should improve as a
result of efficiency improvement and refinery
modernisation.
► Loss on gas trading business is expected to
remain around Q1 level for the full year.
-1 000
2009 Q1
2009 Q2
2009 Q3
11
Results and challenges in Finance area
Our results
already
achieved
► INA has set up an Investment Committee in line with MOL practice to control
spending
► Several cost cutting actions were initiated
► Reliable planning and strict monitoring of the results and cash flow
► INA has contracted several bank loans in 2010 in the total value of HRK 1.1 bn to
decrease overdue liabilities towards Croatian State
► INA’s risk management practice has been reviewed and agreed with MOL Group
Risk Management
► Improved co-operation and expert level exchange program with MOL
Key
challenges
► Current level of overdues: HRK 0.7 bn towards state and HRK 0.8 bn towards
suppliers
► Settlement of the high level of overdue trade receivables
► New financing is required for the settlement of overdue liabilities as EBITDA is not
sufficient to finance it together with CAPEX
Actions to be
taken
►
►
►
►
Involvement of new financing to overcome liquidity crisis
Decrease the cost of financing
Improved debt collection
Strengthen financial control on INA Group level
12

right investments with right technical scope in

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