“Some might say that I lack vision. I can admit that. But look how many fail around us, so we focus on maintaining liquidity flows and reducing costs.” In this manner synthesized the chief executive of OMV, Petrom’s majority shareholder, the Austrian group’s strategy for the next five years. “We want a position sustainable in the production area, we restructure the businesses in the region to exploit gas and continue to raise our competitiveness in petroleum processing”, said Rainer Seele presenting to the Romanian journalists the context and the main decisions within which OMV will act in the coming years.
Clear, sure of himself, often sharp in formulations, generous with praise and relentless to adverse positions, Rainer Seele wanted to clarify that he speaks from the position of the most important investor in the energy sector in Romania. Seele began by putting the activity of OMV in context: oil and gas market is under pressure, prices are at unexpectedly low levels, and refining margins will decline, after increases of recent years.
The main asset of the Austrian Group is an integrated business model, which enables additional stability in a business environment dominated by uncertainty and large swings.
The main ideas delivered by Rainer Seele
YES
Exploration and production are important, but they are only one of the group’s business units.
YES
The planned asset exchange with Gazprom will take place and is designed to allow cost convenient replacement of reserves. OMV has planned that 90% of planned investments by 2020 to go into the main two areas – Austria and Romania, countries in which OMV holds mature fields.
NO
Romania has never occurred during the talks with Gazprom about a possible exchange of assets. Why? Because Romania, central element in the integrated business model of OMV, is very powerful, and “you don’t change a winning team”.
NO
Asked about the hypothesis of changing the executive management from Romania, Rainer Seele vehemently ruled out this idea: “Petrom is now in a position totally different from 10 years ago and I do not want to change anything that works very well.” Mariana Gheorghe is “one of the best CEOs that I have met”, and the idea related to her demise is a rumor with no basis, clarified Rainer Seele.
NO
“We do not want to sell Brazi power plant because it is placed in the middle of our business and it already provides a significant share of the market (around 10%) for power generation.” A business that otherwise becomes marginal at group level, following the decision to sell the gas-fired power plants in Germany and Turkey. After “a painful journey into the realm of electrons”, “we intend to exit electricity generation, because we are an oil and gas company,” said Seele. “We, OMV, not OMV Petrom”, he stressed, because “Romania is a whole new world, a better world, in terms of electricity production”.
YES
Rainer Seele supports the involvement of OMV in Nord Stream 2 pipeline, planned to become operational in a few years, which they consider a safe project from a financial standpoint and a security element in the supply of natural gas to Europe. “In 48 years of business relations with Gazprom, the Russian company has always respected the terms of contracts, and today is committed to invest in the Baltic Sea pipeline,” insisted Rainer Seele, when he was provoked to comment on the risks brought by geopolitical risks and the hostility between Russia and euro-Atlantic community.
YES
Black Sea reserves remain a priority, but “I do not think gas will be extracted until 2020,” said Seele. Romanian State’s decision on the tax regime will influence the future strategy of the group: “stable taxation is essential, regardless of Government or Minister of Energy, because we are planning investments with a timetable of 20-25 years.” Rainer Seele did not mention any concrete evidence of this fiscal framework (royalties, income tax, surcharge tax, special constructions tax etc.), but evoked Great Britain and Germany examples, where authorities have taken measures to support the industry when the overall context endangered the stability of oil and gas production.
NO
Black Sea gas does not compete with Russian gas, Rainer Seele believes, “because we need both resources.” Most of OMV investment will go to Romania, and the eventual Black Sea production would be sold in Romania, Bulgaria and the countries of Central Europe, due to lower costs of transport. However, everything will depend on gas prices and demand in the region.
NO
“OMV is a producer of cars. OMV is not producing electricity. It will take long until there will be a market for electric cars” are the strong ideas of a convinced follower of the business model focused on oil and gas. Rainer Seele repeatedly labeled OMV as an oil and gas company, even when have been brought to his attention the diversifying trends that other (older) players have adopted. “I’m focused on the present, when we need stability,” said Seele. “I am convinced that in 10 years we will need even more gas because it is a better alternative than coal in terms of the environment,” said OMV leader.
