OMV SWOT & PESTLE Analysis

Strength

1. Presence in both upstream and downstream business of oil and gas: OMV Upstream business investigates for and produces oil and gas in its five core regions of Central and Eastern Europe, the Middle East and Africa, the North Sea, Russia, and Asia-Pacific. As of 2019, daily production was nearly 487 kboe/d (equal to 177.9 mn boe). 57% of total production accounted for the gas output, oil and NGL flows made up 43%. As of early 2020, proven reserves amounted to 1.33 bn boe. In 2019, the Upstream business generated strong earnings with a clean Operating Result of EUR 2.0 bn. Downstream Oil (incl. Petrochemicals) operates three refineries in Austria, Germany, and Romania, and holds a 15% share in ADNOC Refining and Trading JV. In 2019, the processing capacity amounted to 24.9 mn t (equaling more than 500 kbbl/d). The group also operates a globally situated multi-brand filling station retail network and a high-quality commercial business. Downstream Gas explores across the gas value chain from the wellhead to the burner tip with a fully integrated gas business. It includes the Group’s power business activities, with one gasfired power plant in Romania.

2. Strong focus on natural gas exploration: OMV concentrates mainly on the Central and Eastern Europe to meet the demand for oil and gas. Oil demands are in decline in these regions but natural gas has stable prospects in future due to its advantage of being a source of cleaner energy, concerned with the demand of existing market, the company has increased production in the natural has. In 2019, share of production of natural gas in upstream was 57%. In Europe, coal powered plants are converted into gas powered plants. By 2030, the requirement of gas would rise to 30 bcm. However, OCM would increase the gas production and refining to meet levels of 20 bcm by 2025. OMV would mainly focus on the largest market of natural gases in Europe, Germany. OMV plans to increase its supply of natural gases in the refineries of Europe and through partnership with Gazprom.

Weakness

Opportunity

Threats

Political

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Economic

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Social

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Technological

1. Increasing productivity and safety by using of digitization: Digitization has also entered the oil and gas industry as companies are increasingly becoming aware of the benefits of using technology for increasing safety and efficiency of operations. Technology like Big Data, Analytics, Automation & AI, 3D printing, Internet of Things (IoT) are slowly being incorporated as a means of overcoming challenges like falling oil prices, increased climate accountability and a lack of skilled professionals. OMV has incorporated digitization through the DigitUP program that it launched in 2018. 3D models are used in this program to simulate subsurface assets which helps to improve efficiency of exploration and development projects. The company has also successfully used drones in several projects as they help in reducing inspection times, significantly reduce the risk exposure of service personnel and even cut down costs by as much as 25%.

2. Usage of latest SOR to increase productivity of oil fields: OMV concentrates on increasing the life cycle of its oil exploration sites, through the usage of technology. It uses several oil recovery methods. These methods converge into Smart Oil Recovery 3.0 (SOR). The methods are tested and verified at its two upstream laboratories, OMV Tech Center and OMV Petrom Upstream Laboratories. SOR has increased productivity of oil fields by 15% and OMV plans to use the SOR in all its upstream projects. 5 wells are already using SOR. 8 more wells would use SOR in 2020-2021. SOR is mainly implemented in the fields of Austria and Romania.

Legal

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Environmental

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