By Nicoleta Banila
OMV Petrom CEO
OMV Petrom’s first-half results give grounds to expect another year of outstanding performance despite the ongoing market volatility. What are your projections for your full-year financial results?
This is a year like no other for the global economy. We are experiencing unprecedented market imbalances, volatile commodity prices, security of supply concerns, and supply chain disruptions. Inflationary effects are eroding consumer earnings and generating demand destruction. This challenging landscape is the consequence of the response to the war in Ukraine, which overlapped with already overheated energy markets that were stretched due to the strong increase of the post-pandemic demand. At the same time, governments are trying to protect vulnerable consumers; however, some of the regulatory changes and market interventions are exacerbating the market volatility.
Given these uncertainties, we are channeling our actions to contribute to the security of energy supply in Romania and also to the country’s investment-led economic growth. We are an energy company, and our goal is to continue uninterrupted deliveries of gas, electricity and fuels to our customers.
How do you offset the risks linked to disrupted Russian gas flows to Europe?
Romania is the second largest EU natural gas producer and has a relatively lower import dependency as compared to its neighbours. Having its own natural resources is a defining advantage for Romania’s energy security. Currently, we are replenishing the gas storage needs in accordance with the obligation in place for winter consumption, and we will be compliant in terms of quantities. Our equity gas should be sufficient to cover the current needs of our customers. Additionally, we are actively working on diversifying our supply sources to strengthen the security of supply.
In the Upstream segment, do you have plans for new drilling campaigns and exploration licenses?
We planned investments for this year worth about 4 billion lei, depending on the economic environment. This is an increase of almost 50% compared to last year. Regarding the upstream segment, we plan investments amounting around 2.6 billion lei. The number of total wells planned to be drilled in 2022 is expected at around 60. However, starting in mid-2021, the cost per well drilled has increased. We also plan for this year around 600 workovers.
What is the current status of the Neptun Deep project?
As I previously said, the greatest advantage for Romania’s energy security is the fact that it has access to its own resources. However, this is a fragile position because Romania has mature and declining onshore gas production. In this context, Neptun Deep is a strategic project for Romania’s energy security and, as well, for the energy transition. To increase the country’s natural gas production, it is essential to develop the Neptun Deep gas resources.
Regarding the status of the project, we have an international project team in place, highly qualified and experienced. And we work closely with our joint venture partner, Romgaz. We look forward to having all the prerequisites in place in order to progress with the project and bring the natural gas into the system. However, clarifications on the Offshore Law are still needed from the authorities. I am certain that the Romanian authorities understand the strategic importance of the Neptun Deep project and I am sure that we will receive the clarifications we have requested as soon as possible.
In the Downstream sector, what investments do you plan in the Petrobrazi refinery?
The refining sector is preparing to go through a period of profound transformation in the coming years. It will have to meet both the current mobility needs, and at the same time, work to reduce the CO2 emissions of the sector.
In 2021, we launched our Strategy 2030, putting forward the largest investment plan in the Romanian energy sector, of 11 billion euro. A third of these investments, approximately 3.7 billion euro will go to low and zero carbon solutions.
And we are proud that Petrobrazi is the first refinery in Romania to produce sustainable aviation fuel. We recently announced, in July, the production of the first batch of SAF at Petrobrazi, based on locally produced rapeseed oil. We aim to increase our production capacities in the future, in order to produce advanced sustainable fuels based on various waste feedstocks, such as used cooking oil. At the same time, we are working to implement an innovative technology for carbon capture and utilization, as part of a European consortium.
How are you progressing towards meeting your strategic goal to reduce your carbon footprint?
We are committed to support the energy transition. Sustainability is at the core of our activity, and we make continuous efforts to reduce the carbon emissions from our operations. In 2021, our GHG intensity declined by 10% versus 2019, throughout all business segments. This effort takes us closer to our – 30% target by 2030 versus 2019.
Our strategy was built on the sustainability frame and that means a continuous focus on people and communities, on responsible operations, as well as on innovation and digitalization. We target net zero carbon operations by 2050 and we are also committed to supporting our customers in reducing their carbon emissions.