OMV

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OMV AG
Aktiengesellschaft
Traded asWBAGOMV
ISINAT0000743059 Edit this on Wikidata
IndustryOil and gas
Founded1956
HeadquartersVienna, Austria
Key people
Rainer Seele (CEO)
ProductsOil and gas exploration and production, natural gas trading and transportation, oil refining, electricity generation
ServicesFuel stations
Revenue19,260,000,000 euro[1] (2016) Edit this on Wikidata
-457,000,000 euro[1] (2016) Edit this on Wikidata
Increase 853 million EUR (2017)
Total assets16,301 in Euro (mn) (2017)
Number of employees
20,723(2017)
Websitewww.omv.com

OMV (formerly abbreviation for Österreichische Mineralölverwaltung (English: Austrian Mineral Oil Administration)) is an Austrian integrated oil and gas company which is headquartered in Vienna, Austria. The company is listed on the Vienna Stock Exchange.

It is active in the upstream and downstream businesses.[2]

History[edit]

The OMV head office in the Hoch Zwei skyscraper in Vienna

The history of OMV began on July 3, 1956, when the company then known as “Österreichische Mineralölverwaltungs Aktiengesellschaft” was officially entered into the commercial register.[3] Consequently, the Soviet Mineral Oil Administration (Sowjetische Mineralölverwaltung, SMV), a corporation formed during the Soviet zone of occupation in post-war Austria became “Österreichische Mineralölverwaltungs Aktiengesellschaft”.

Four years later, in 1960, the company opened the Schwechat refinery near Vienna, in 1968 the first natural gas supply contract with the former USSR were entered.[4] At the end of 1987, 15% of OMV was privatised, making it the first public listing of a state-owned company in Austria. In 1989, OMV acquired a 25% stake in plastics group, Borealis.

In 1990 the company opened its first filling station in Vienna-Auhof on 26 June 1990.

The International Petroleum Investment Company (IPIC) of Abu Dhabi acquired an initial 19.6% interest in the group at the end of 1994. The following year, the group changed its name from "ÖMV" to "OMV" because the umlaut on the "Ö" is not commonly used in many languages.

In the early 2000s, OMV expanded into Eastern Europe, by acquiring around 10% of Hungarian oil company, MOL and in 2003 it acquired the upstream division of Germany's Preussag Energie, expanding its filling station networks.

OMV oil refinery in Schwechat (near Vienna)

In 2004, OMV became the market leader in Central and Eastern Europe following the acquisition of 51% of Romanian oil and gas group Petrom which constitutes the largest acquisition in OMV's history.

In the same year, OMV increased its share capital, meaning that more than 50% of the company's shares were in free float for the first time.

Following the sale of 50% of the subsidiary company Agrolinz Melamine International GmbH to IPIC in 2005, the Borealis group was taken over in full together with IPIC.

In 2006, OMV acquired a 34% stake in Turkish oil company Petrol Ofisi. In the same year, the board members of OMV and Verbund, the Austrian utility group announced plans for a merger. However, this collapsed due to resistance from Austrian MPs.

OMV increased its stake in Hungarian oil group MOL to 20.2% in 2007. OMV then sold its entire stake in March 2009 after MOL rejected a takeover bid in 2008 and the European Commission imposed tough restrictions for an approval of the deal. OMV acquired the stake held by Dogan Holding in Petrol Ofisi in late 2010, which further increased its stake in the company to 95.75%.

In 2012, the Domino-1 well in the Romanian Black Sea exploration licence Neptun was the most significant discovery in that year, which has the potential to be OMV's most important gas discovery ever.[5]

On October 31, 2013 the acquisition deal with Norwegian Statoil containing participations in oil and gas fields and in development projects in Norway and the UK was closed. With 2.65 bn USD, this is the largest transaction in OMV's history.[6]

A divestment agreement for the 45% stake in Bayernoil was signed in December 2013. The sale was closed in June 2014.[7]

In 2015 OMV increased its interest in Petrol Ofisi to 100%,.[8] Two years later, in 2017, OMV sold Petrol Ofisi to Vitol Group [9]

Finance information[edit]

Shareholder structure 2016[edit]

  • ÖBIB, formerly ÖIAG (31.5%)
  • IPIC (24.9%)
  • Employee share programs (0.4%)
  • Treasury Shares (0.3%)
  • Free float (42.9%)[10]

Shareholdings[edit]

The most important shareholdings of OMV Aktiengesellschaft are listed below, with other shareholdings held by the appropriate business segments:[11]

  • Borealis AG (36%)
  • Gas Connect Austria (51%)
  • OMV Petrom SA (51%)

Business segments[edit]

OMV Upstream portfolio
OMV Downstream Oil portfolio
OMV Downstream Gas portfolio

Upstream[edit]

In Upstream, OMV focuses on the exploration, development and production of oil and gas in four core regions, 1) Central and Eastern Europe, 2) the North Sea, 3) the Middle East and Africa, and 4) Russia. At the end of 2016, OMV Upstream was active in 15 countries across the globe and had proven reserves (1P) of 1.03 bn boe and proven and probable reserves (2P) of 1.7 bn boe. The Reserve Replacement Rate (RRR) was 101% in 2016. Daily production was 311 kboe/d in 2016, which equals a total production of 113.8 mn boe. Around 90% of its production in 2016 came from EU/OECD countries. The oil/gas split in production is roughly 50/50.[2]

Downstream[edit]

Downstream Oil operates three refineries: Schwechat (Austria) and Burghausen (Germany), both of which feature with integrated petrochemical production, as well as the Petrobrazi refinery (Romania) which processes predominantly Romanian crude. OMV has an annual refining capacity of 17.8 mn t by the end of 2016. The retail network consists of more than 2,000 filling stations in 10 countries with a strong brand portfolio. Together with a high-quality non-oil retail business (VIVA) and an efficient commercial business, OMV has a leading position in its markets.[2]

In Downstream Gas, the natural gas sales volumes amounted to 109 TWh in 2016. OMV operates a gas pipeline network in Austria and owns gas storage facilities with a capacity of 2.7 bcm (30 TWh). The Central European Gas Hub (CEGH) is a well-established gas trading platform The gas distribution node in Baumgarten is Central Europe's largest entry and gas distribution point for Russian gas. OMV also operates two gas-fired power plants, one in Romania and one Turkey.[2]

Controversies[edit]

War crimes in Sudan[edit]

In June 2010, the European Coalition on Oil in Sudan (ECOS)[12] published the report "Unpaid Debt",[13] that called upon the governments of Sweden, Austria, and Malaysia to look into allegations that OMV, Lundin Petroleum, and Petronas may have been complicit in the commission of war crimes and crimes against humanity whilst operating in Block 5A, South Sudan (then Sudan), during the period 1997-2003. The reported crimes include indiscriminate attacks and intentional targeting of civilians, burning of shelters, pillage, destruction of objects necessary for survival, unlawful killing of civilians, rape of women, abduction of children, torture, and forced displacement. When the consortium that OMV took part in operated in Block 5A, approximately 12.000 people died and 160.000 were violently displaced from their land and homes, many forever. Satellite pictures taken between 1994 and 2003 show that the activities of OMV in Sudan coincided with a spectacular drop in agricultural land use in its concession area.[14]

In June 2010, the Swedish public prosecutor for international crimes opened a criminal investigation into links between Sweden and the reported crimes. In 2016, Lundin Petroleum's Chairman Ian Lundin and CEO Alex Schneiter were informed that they were the suspects of the investigation. Sweden's Government gave the green light for the Public Prosecutor in October 2018 to indict the two top executives[15] On 1 November 2018, the Swedish Prosecution Authority notified Lundin Petroleum AB that the company may be liable to a corporate fine and forfeiture of economic benefits of SEK 3,285 (app. €315 million) for involvement in war crimes and crimes against humanity.[16] Consequently, the company itself will also be charged, albeit indirectly, and will be legally represented in court. On 15 November 2018 the suspects were served with the draft charges and the case files.[17] They will be indicted for aiding and abetting international crimes and may face life imprisonment if found guilty.[18] The trial is likely to open in the Autumn of 2020 and may take two years.

The Swedish war crimes investigation raises the issue of access to remedy and reparation for victims of human rights violations linked with business activities. In May 2016, representatives of communities in Block 5A claimed their right to remedy and reparation and called upon OMV and its shareholders to pay off their debt to them.[19] A conviction in Sweden may provide some level of remedy and reparation for the few victims of human rights violations who will testify in court, but not for the other 200,000 victims who will not be represented in court. The Swedish court cannot impose obligations upon OMV.

On 23 May 2019, the T.M.C. Asser Institute for International Law in The Hague organized the conference 'Towards criminal liability of corporations for human rights violations: The Lundin case in Sweden'.[20]

OMV endorses the UN Guiding Principles on Business and Human Rights, acknowledging the duty of business enterprises to contribute to effective remedy of adverse impact that it has caused or contributed to.[21] The company has never publicly showed an interest in the adverse impacts of its activities on the communities in its concession area. According to the Dutch peace organisation PAX, the companies OMV, Lundin Petroleum, Petronas, as well as their shareholders are disregarding the human rights standards that they claim to respect, notably the OECD Guidelines and UN Guiding Principles, because they, A. never conducted an appropriate due diligence for their Sudanese operations; B. made no effort to know their human rights impacts; and C. do not show how they address alleged adverse human rights impacts.[22]

OMV (Sudan) Exploration GmbH, a wholly owned subsidiary of OMV AG, held a 26.1% share in the consortium that acquired the right to explore and develop oil deposits in Block 5A. It sold its Sudanese assets in 2004 with a net profit of $55 million.[23] As the operator of the consortium, Lundin Petroleum was responsible for day-to-day management but its managers stood under the supervision of the Operating Committee, that exercised "overall direction and control of all matters pertaining to the Joint Operations and the Joint Property". OMV was permanently represented in the Operating Committee and has never publicly distanced itself from any of its decisions.[24]

Between 2001 and 2003, OMV met repeatedly with European human rights advocates led by Sudan Platform Austria, but the company took no effective measures to prevent involvement in human rights violations or undo the adverse impact of its consortium's operations. On April 6, 2001, OMV wrote to Human Rights Watch: “We have reached the conclusion that, despite problems, the influx of oil revenues could improve the social and humanitarian conditions of the Sudanese. Oil exploration activities also represent immediate benefits to the local population, in terms of employment, infrastructure developments and humanitarian assistance... Our role is to constantly monitor the situation on the ground and to turn our perception of business ethics into reality by responsible action.[25] In 2002, OMV nevertheless commissioned an independent report on the human rights situation in Block 5A, that has not been made public.[26]

OMV was a loyal participant in the consortium that operated in Block 5A and had a substantial say in the way it operated. The suspicions against the consortium's top managers therefore also concern OMV. The Austrian State's owns 31% of OMV's shares. According to the UN Guiding Principles, which is endorsed by Austria, an abuse of human rights by a business enterprise that is wholly or partially controlled by a State, may entail a violation of that State's own international law obligations.[27]

Petrom[edit]

The acquisition of 51% stake in Petrom was considered controversial as the privatisation contract was not made public and it consists of several disputed clauses.

The privatisation allegedly produced a market monopoly. Critics say that OMV can use the resources Petrom owns until their exhaustion. Also fixing of tax for gas and oil exploration at 3 to 13.5 percent from the final delivery price for 10 years was criticised. Some critics claimed, that the price €1.5 billion was too low.

MOL[edit]

In June 2007 OMV made an unsolicited bid to take over MOL, which was rejected by the Hungarian company. MOL criticised OMV's advertisement in which OMV had suggested the two had already worked together on the European market. MOL thought that to be misleading and unethical and asked OMV to remove the name MOL from those advertisements. OMV dismissed its bid after negative results of the investigation by the European competition authorities.[28][29] OMV sold its entire stake to Surgutneftegas in March 2009.[30]

New Zealand[edit]

On 10 April 2019 OMV announced that it would drill up to ten wells off the Otago, New Zealand coast.[31] The decision was met with indications by local environmental groups, who had successfully fought previous attempts to drill for fossil fuels in the area, that OMV could "expect resistance".[32]

See also[edit]

References[edit]

  1. ^ a b http://www.omv.com/SecurityServlet/secure?cid=1255774724505&lang=en&swa_id=426192222530.86884&swa_site=.
  2. ^ a b c d OMV Annual Report 2016
  3. ^ 60 years and still going strong: OMV’s moving history Retrieved on July 4, 2016.
  4. ^ "OMV History". OMV. Retrieved 31 March 2014.
  5. ^ OMV Press Release ExxonMobil / OMV Petrom: Deep water gas discovery offshore Romania. Retrieved on April 7, 2017.
  6. ^ OMV Press Release OMV closes acquisition deal with Statoil. Retrieved on April 7, 2017.
  7. ^ OMV Press Release OMV: Downstream restructuring on track. Retrieved on April 7, 2017.
  8. ^ OMV Annual Report 2015 Accounting principles and policies, p. 66. Abgerufen am 7. April 2017.
  9. ^ OMV Press Release OMV divests wholly owned subsidiary OMV Petrol Ofisi to Vitol Group. Retrieved on April 7, 2017
  10. ^ OMV Annual Report 2016 OVM on the Capital Markets, p. 46. Retrieved on April 7, 2017.
  11. ^ OOMV Annual Report 2016 Direct and indirect investments of OMV Aktiengesellschaft, p. 209ff. Retrieved on April 7, 2017.
  12. ^ "ECOS Database". European Coalition on Oil in Sudan.
  13. ^ "Unpaid Debt, The legacy of Lundin, Petronas, and OMV in Block 5A, Sudan, 1997-2003". European Coalition on Oil in Sudan. Retrieved 28 June 2019.
  14. ^ "Satellite mapping Block 5A" (PDF). Prins Engineering. 30 August 2009. Retrieved 28 June 2019.
  15. ^ "Lundin faces prosecution for Sudan oil war abuses". Justice Info. 23 October 2018. Retrieved 28 June 2019.
  16. ^ "Regulatory disclosure". Lundin Petroleum website. Retrieved 28 June 2018.
  17. ^ "Lundin Petroleum Receives Final Notice before Indictment". Retrieved 29 June 2019.
  18. ^ "Swedish oil bosses set to be charged on South Sudan". Financial Times. 18 October 2018.
  19. ^ "Victim's Remedy Claim". Unpaid Debt. Retrieved 2 July 2018.
  20. ^ "Towards criminal liability of corporations for human rights violations: The Lundin case in Sweden".
  21. ^ "OMV Sustainability Report 2017" (PDF). Retrieved 28 June 2019.
  22. ^ "How Lundin, OMV, and Petronas do not respect human rights". PAX.
  23. ^ "OMV on the move in 2004: Annual Report" (PDF). Retrieved 28 June 2019.
  24. ^ Joint Operating Agreement between IPC Sudan Limited and Petronas Carigali Overseasn Sdn Bhd and OMV (SUDAN) Exploration GmbH and Sudapet Ltd. SUDAN BLOCK 5A, 7 April 1999.
  25. ^ "OMV (Sudan): Excited about Thar Jath Discoveries". Human Rights Watch. Retrieved 28 June 2019.
  26. ^ Louis Charbonneau, “OMV studying human rights situation in Sudan,” Reuters, Vienna, July 11, 2002
  27. ^ UN Guiding Principles on Business and Human Rights, p. 7.
  28. ^ "European Commission closes door on OMV-MOL merger plan". Realdeal.hu. 7 August 2008. Retrieved 7 December 2008.
  29. ^ "OMV gets EU objections statement over MOL takeover bid". Forbes. 24 June 2008. Archived from the original on 24 May 2011. Retrieved 6 December 2008.
  30. ^ "OMV sells MOL stake". OilVoice. 30 March 2009. Retrieved 30 March 2009.
  31. ^ "Gas and oil exploration move off Otago coast". Otago Daily Times. 10 April 2019. Retrieved 14 April 2019.
  32. ^ "'Expect resistance', oil company told". Otago Daily Times. 10 April 2019. Retrieved 14 April 2019.

External links[edit]