Annual Report 2018
7
reasons
why we’re excited
about tomorrow
At a Glance
Five-Year Summary
Sales 2
Operating Result
Profit from ordinary activities
Taxes on income
Net income for the year
Net income attributable to stockholders of the parent
Clean CCS Operating Result 3
Clean CCS net income attributable to stockholders
of the parent 3
Balance sheet total
Equity
Net debt
Average capital employed
Cash flow from operating activities
Capital expenditure
Organic capital expenditure 4
Free cash flow
Free cash flow after dividends
Net Operating Profit After Tax (NOPAT)
Clean CCS NOPAT 3
Return On Average Capital Employed (ROACE)
Clean CCS ROACE 3
Return On Equity (ROE)
Equity ratio
Gearing ratio
Earnings Per Share (EPS)
Clean CCS Earnings Per Share 3
Cash flow per share 5
Dividend Per Share (DPS) 6
Payout ratio
Employees as of December 31
Production
Proved reserves
Total refined product sales
Natural gas sales volumes 7
Lost-Time Injury Rate (LTIR)
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
2018
22,930
3,524
3,298
(1,305)
1,993
1,438
3,646
2017
20,222
1,732
1,486
(634)
853
435
2,958
2016
19,260
(32)
(230)
47
(183)
(403)
1,535
2015
22,527
(1,661)
(1,909)
654
(1,255)
(1,100)
1,737
2014 1
35,913
1,149
792
(265)
527
278
2,418
in EUR mn
1,594
1,624
995
1,148
1,132
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in %
in %
in %
in %
in %
in EUR
in EUR
in EUR
in EUR
in %
in kboe/d
in mn boe
in mn t
in TWh
per mn h worked
36,961
15,342
2,014
16,850
4,396
3,676
1,893
1,043
263
2,097
2,196
12
13
14
42
13
4.40
4.88
13.46
1.75
40
20,231
427
1,270
20
114
0.30
31,576
14,334
2,005
15,550
32,112
13,925
2,969
17,943
32,664
14,298
4,038
19,972
33,855
14,514
4,902
19,760
3,448
3,376
1,636
1,681
1,013
987
2,169
6
14
6
45
14
1.33
4.97
10.56
1.50
113
20,721
348
1,146
24
113
0.34
2,878
1,878
1,868
1,081
615
(88)
1,325
0
7
(1)
43
21
(1.24)
3.05
8.82
1.20
n.m.
22,544
311
1,030
31
109
0.40
2,834
2,769
2,749
(39)
(569)
(1,119)
1,522
(6)
8
(9)
44
28
(3.37)
3.52
8.68
1.00
n.m.
24,124
303
1,028
30
110
0.27
3,666
3,832
3,580
272
(377)
627
1,697
3
9
4
43
34
0.85
3.47
11.24
1.25
147
25,501
309
1,090
31
114
0.44
1 As of 2015, figures for 2014 were adjusted according to IAS 8
2 Sales excluding petroleum excise tax
3 Adjusted for special items. Clean CCS figures exclude inventory holding gains/losses (CCS effects) resulting from the fuels refineries and OMV Petrol Ofisi.
4 Organic capital expenditure is defined as capital expenditure including capitalized Exploration and Appraisal expenditure excluding acquisitions and contingent considerations.
5 Cash flow from operating activities
6 2018: As proposed by the Executive Board and confirmed by the Supervisory Board, subject to confirmation by the Annual General Meeting 2019.
7 As of 2015, this KPI reflects only third-party volumes and excludes trading volumes, historical figures were adjusted accordingly.
Fields of Activity
Upstream
OMV Upstream explores and produces oil and gas in its
five core regions Central and Eastern Europe, Russia, the
North Sea, Middle East and Africa, and Asia-Pacific. Daily
pro duction in 2018 was 427 kboe/d (equal to 156 mn boe).
While gas production accounted for 57% of production, oil
amounted to 43%. At year- end, proven reserves amounted
to 1.27 bn boe.
Central and
Eastern Europe
Russia
North Sea
Austria
Bulgaria
Romania
Kazakhstan
Norway
Annual production per country 2018
In mn boe
Middle East
and Africa
Kurdistan Region of Iraq
Libya
Madagascar
Pakistan 1
Tunisia
United Arab Emirates
Yemen
Asia-Pacific
Australia
Malaysia 2
New Zealand
Norway
27.3
Austria
9.4
Tunisia
1.8
Kazakhstan
2.5
Russia
36.4
Romania
55.8
Pakistan 1
1.3
United
Arab
Emirates
1.8
Kurdistan
Region of Iraq
2.8
Yemen
1.1
Libya
10.9
Malaysia 2
New Zealand
4.8
1 The upstream business in Pakistan was divested on June 28, 2018.
2 On January 31, 2019 OMV acquired a 50% interest in SapuraOMV Upstream Sdn. Bhd. In addition to the Malaysian footprint, SapuraOMV Upstream has exploration assets in
New Zealand, Australia and Mexico.
Y
T
I
V
I
T
C
A
F
O
S
D
L
E
I
F
Downstream
Downstream Oil (incl. Petrochemicals) operates three refineries
in Austria, Germany and Romania, an international multibrand
filling station retail network, and a high-quality commercial
business. In 2018, OMV processing capacity was 17.8 mn t.
Downstream Gas operates across the gas value chain from the
wellhead to the burner tip of the end customer with a fully
integrated gas business.1 It includes the Group’s power busi-
ness activities, with one gas-fired power plant in Romania.
Downstream
Oil & Gas market
Downstream Oil market
Downstream Gas market
Austria
Germany
Hungary
Romania
Slovenia
Bulgaria
Czech Republic
Moldova
Serbia
Slovakia
Netherlands
Turkey
Downstream presence in 2018
139 92 197
294
430
118
61
93
558
82
2
OMV
refineries
Number of
filling stations
Equity
gas
Gas
storage
Gas
pipelines
Gas-fired
power plant
LNG
terminal
1 OMV’s gas business is operated in strict adherence to the applicable gas unbundling rules.
2 OMV divested the Samsun power plant in Turkey on September 6, 2018.
7 reasons why we’re
excited about tomorrow
7 reasons that pinpoint what will determine
the future success of our industry. 7 reasons
that show what makes our company special.
In recent years OMV has proven that it delivers on
its promises. We have secured a healthy foundation,
formulated a clear strategy, and are bringing it to
life together with over 20,000 employees worldwide.
We understand our business and we know what
is important today along with what we need to be
successful tomorrow. Last but by no means least,
we have customers, shareholders, and partners who
have placed their trust in us for decades. We wish
you an exciting journey through the world of OMV.
FINANCIAL CALENDAR
April 10, 2019
Trading Update Q1 2019
May 3, 2019
Results January– March 2019
May 4, 2019
Record date for the Ordinary Annual General Meeting"
May 14, 2019
Ordinary Annual General Meeting
May 21, 2019
Dividend ex-date
May 22, 2019
Dividend record date
May 23, 2019
Dividend payment date
July 9, 2019
Trading Update Q2 2019
July 31, 2019
Results January–June and Q2 2019
October 9, 2019
Trading Update Q3 2019
October 30, 2019
Results January– September and Q3 2019
January, 2020
Trading Update Q4 2019
February, 2020
Results January– December and Q4 2019
March, 2020
Publication of the Annual Report 2019
Please check here for final confirmation:
www.omv.com/financial-calendar
2
Contents
7 REASONS WHY WE'RE EXCITED ABOUT TOMORROW
1 — TO OUR SHAREHOLDERS
Interview with the Chairman of the Executive Board
OMV Executive Board
Report of the Supervisory Board
OMV on the Capital Markets
2 — DIRECTORS’ REPORT
About OMV
Strategy
Sustainability
Health, Safety, Security, and Environment
Employees
OMV Group Business Year
Upstream
Downstream
Outlook
Risk Management
Other Information
3 — CONSOLIDATED CORPORATE GOVERNANCE REPORT
4 — CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
Auditor’s Report
Consolidated Income Statement for 2018
Consolidated Statement of Comprehensive Income for 2018
Consolidated Statement of Financial Position as of December 31, 2018
Consolidated Statement of Changes in Equity for 2018
Consolidated Statement of Cash Flows for 2018
Notes to the Consolidated Financial Statements
5 — FURTHER INFORMATION
Consolidated Report on the Payments Made to Governments
Abbreviations and Definitions
Contacts and Imprint
4
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48
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64
71
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225
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235
3
1.
We know
that success
requires
perfect balance.
The future belongs to those who can stand firm on their own two feet and yet still move
freely. OMV explores, finds, produces, transports, and refines oil and gas. It then sells both –
also via captive distribution channels – to the end customer. The business model integrating
Upstream and Downstream enables us to balance out market fluctuations and safeguards
earnings against volatile oil and gas prices. The growth of the Upstream portfolio and
the expansion of the value chain in the Downstream business are opening up additional
opportunities for the company to increase value.
We know
that success
requires
perfect balance.
Liudmila Konovalova, prima ballerina of the Vienna State Ballet. OMV is the general sponsor of the Vienna State Opera.
2.
We explore
new worlds.
Anyone who wants to be excited about tomorrow has to be willing to travel new paths. In
2018, OMV acquired substantial assets in Abu Dhabi and New Zealand and took its first step
toward Southeast Asia with an upstream stake in Malaysia. By establishing Asia-Pacific as
the fifth core region, the Upstream Business Segment is securing valuable resources and
diversifying its geographic profile. And this adds strategic value: In future OMV will be even
more capable of mitigating geopolitical crises. Downstream internationalization toward the
Middle East and Asia is also opening up attractive potential in the world‘s largest growth
region for oil, gas, and petrochemicals.
3.
We grow
production,
profitability,
and reserves.
Wherever you look, global energy demand is rising. In order to be ideally equipped for
international markets, OMV is committed to organic growth and the strategic acquisition
of profitable assets. The goal by 2025: doubling production to 600,000 barrels a day and
increasing reserves to over two billion barrels of oil equivalent. And the increase in efficiency
has been just as successful: In the past three years we have managed to practically halve
production costs.
We grow
production,
profitability,
and reserves.
Umm Lulu offshore field, Abu Dhabi. OMV stake: 20 percent.
4.
We are stepping
on the gas toward
our energy future.
Gas is not only gaining importance in relation to mobility and heating. As a key source for
the new energy era, it also facilitates an exit from coal, thereby making an immediate and
essential contribution to reducing CO2 and protecting the climate. OMV‘s strategy is strongly
aligned toward gas: increasing the share of gas in the Upstream portfolio to over 50 percent,
becoming the leading integrated gas supplier from Northwest to Southeast Europe, doubling
gas sales in Europe, and growing market share in Germany to ten percent. In addition, OMV
intends to expand its logistics services in transportation, storage, and at the Baumgarten gas hub.
We are stepping
on the gas toward
our energy future.
5.
We refine
valuable
resources.
Crude oil is a valuable raw material. But even with crude, it‘s all about what you make of it.
And this is why OMV‘s strategy for the future involves refining instead of burning. Here we
have increased our commitment to developing and producing more valuable products by
promoting the production of innovative precursor products in petrochemicals such as for
lighter cars, modern packaging solutions, or medical applications. At the same time, OMV is
expanding its production capacities for jet fuel. All of this results in higher profitability and
outstanding results that are welcome news for every stakeholder.
We refine
valuable
resources.
6.
We research
the resources
of tomorrow.
If you want to make a sustainable difference to the way resources are used, you had
better take things in hand. This is why OMV will invest up to EUR 500 million in innovative
projects by 2025. The best example of this is the ReOil® research project: By converting plastic
waste into oil, we have managed to produce 100 liters of crude per hour from 100 kg of used
plastic in our pilot plant in the Schwechat Refinery. What‘s more, the OMV Sustainability
Strategy 2025 strives to continuously improve the entire company‘s carbon footprint. By 2025,
it should be decreased by 19 percent versus 2010 for operations and by four percent for the
product portfolio.
7.
We create value
that makes
people happy.
A key objective for OMV: putting a smile on stakeholders‘ faces. And this is achieved thanks
to the fact that the company has a successful operating business, is in robust financial health,
and pursues a progressive dividend policy. Additional foundations are being put in place
with the OMV Strategy 2025 so that this remains true in the future: through profitable invest-
ments and acquisitions, highly efficient cost structures, and strong cash flow management.
A remarkable example of OMV´s performance: In 2018, both the Upstream acquisitions and
OMV’s record dividend for 2017 were financed from cash flow.
Growth requires strategic thinking,
sound judgment, and passion.
OMV has developed into an extremely healthy and competitive
company. The realignment of the portfolio in Upstream and Down-
stream, as well as the consistent management of costs and cash
flow, have put the company on a highly efficient and profitable
footing. A footing that allows us to face the future with confidence.
Aasta Hansteen – one of the building blocks in OMV‘s record-breaking production volumes.
OMV Strategy 2025: integrated growth,
internationalization, expanding the
gas position, further improvements
to processes and performance.
With the OMV Strategy 2025, presented in March 2018, OMV has written
a new chapter on its journey toward the future. The guiding principle:
profitable growth across every aspect of the successful integrated business
model. Growth in value and in size, which is both international and
sustainable.
In Upstream we intend to double our production and reserves and
safeguard our business in the long term through a cost-optimized
portfolio. However, strategic growth also calls for a geographically well-
balanced portfolio, with which we can mitigate economic and political
risks as effectively as possible. The acquisition of the Shell assets in New
Zealand was an important step in establishing Asia-Pacific as the fifth
OMV core region. In addition, we are active in Southeast Asia for the first
time with the acquisition of a 50 percent stake in the new Malaysian joint
venture company SapuraOMV Upstream. Alongside future growth in
daily production in Malaysian offshore gas fields, this joint venture gives
us access to exploration blocks in New Zealand, Australia, and Mexico.
Our 20-percent stake in the attractive offshore gas fields SARB and Umm
Lulu in Abu Dhabi has improved our growth prospects for production
and reserves. And we expect a similar impact from the planned entry into
two Achimov blocks in Siberia. In Norway we have been able to record
substantial exploration success with the Hades and Iris discovery, as well
as the first gas supplies from the Aasta Hansteen field.
With the purchase of a 15-percent share in ADNOC Refining and in a to-be-
established global Trading Joint Venture announced in January 2019, OMV
will also be represented throughout the entire value chain in Abu Dhabi,
from the borehole to petrochemicals. This will enable us to leverage our
proven expertise in utilizing the integrated business model to what has
the potential to become one of the world‘s largest integrated sites. Upon
closing of the transaction, we will immediately grow our refining capacity
by 40 percent at a single stroke and be able to export 70 percent of the
production to the growth markets of Asia, the Middle East, and Africa.
19
Gas is becoming ever more
of a priority in our production.
As one of Europe‘s most profitable
downstream businesses, we will export our
know-how and business model to key
future markets.
The vision to refine high-value resources
OMV has one of the most profitable downstream businesses in Europe.
What‘s more, our retail business achieved its all-time best results in
2018. The highly developed refinery network of Schwechat-Burghausen-
Petrobrazi and the sale of a high percentage of our products via captive
channels are just two reasons for this. In the coming years, we will
continue to expand our own sales and distribution network. In particular,
our avanti network of automatic filling stations is set to grow from 240 to
440 stations by 2025. In the alternative fuels sector, the OMV filling stations
for natural gas, hydrogen, and electricity, together with Austria‘s first high-
power charging stations opened with IONITY, as well as our SMATRICS
joint venture mean that we are well positioned for any future market
developments.
We are safeguarding our long-term profitability and competitiveness by
producing higher-value products and refining crude. Here we are planning
investments of many hundreds of millions of euros in Burghausen alone to
expand petrochemical capacities, which are set to contribute to production
increases from 2021 onward. In line with market developments, we will
also be producing more jet fuel, thereby significantly extending our
competitive advantage. We will export our successful integrated refinery-
petrochemicals model to international growth markets. In particular,
we intend to leverage the sharp rise in demand in Asia for refinery,
petrochemical, and downstream products to fuel further growth.
Gas: multifaceted growth driver and contributor to energy transition
To become the leading integrated gas supplier from Northwest to
Southeast Europe: As ambitious as the strategic goal may sound, OMV is
actually extremely well placed to secure this position. Especially because
gas in combination with renewables is currently the best answer to the
challenges of climate change: The unavoidable exit from coal is only
possible with gas, CNG cars as well as LNG for trucks and shipping could
immediately lead to substantial reductions in CO2 emissions, and the power-
to-gas technology will soon make it possible to store sustainable power.
Forecasts by the International Energy Agency suggest that by 2030 the
European Union will import more than 80 percent of its growing demand
for natural gas. And OMV covers the entire value chain from production
to transportation and storage through to sales: We produce equity gas
in Austria, Romania, Russia, and Norway. Our infrastructure extends
from the gas hub in Baumgarten to the LNG regasification capacities at
the Gate terminal in Rotterdam, the trading platform and gas exchange
functions of the Central European Gas Hub, as well as a pipeline network
operated by Gas Connect Austria through to substantial storage capacities
with future-proof services and gas filling stations. And no less important
is our effective partnership with Gazprom going back decades. It was
reconfirmed in 2018 by the extension of supply contracts to 2040 and
the increase in supplies to Austria by one billion cubic meters per year.
In addition, the construction of the Nord Stream 2 pipeline is a crucial
component for the security of supply for Austria and Europe. Rapid
progress is being made on the pipeline and the first gas is set to be
transported to Europe at the end of 2019.
20
The Baumgarten gas hub plays a key role in Europe‘s energy supply.
Think digital – in every dimension
The future success of OMV will also depend on its digital fitness. From
intelligent drill heads at depths of thousands of meters to the virtual
depiction of all refinery processes through to the implementation of
robotics and process automation in the course of Finance 4.0, there is
enormous potential for us to leverage. The OMV Digital Journey approved
in 2018 lays out how we will be promoted to the premier league: as part of
the DigitUP initiative, five lighthouse projects and more than 70 individual
projects will be implemented in Upstream. Here, the “Digital Office of
the Future” will mean that all relevant data and documents worldwide
can be accessed in real time, just a click away. And with the “Realtime
Digital Oilfield” we can automate and digitalize processes using sensor
technology and artificial intelligence. With the digital scheduling tool
eTOP, Downstream Oil has already made the complex issue of turnaround
management intuitive in every refinery. And thanks to “autoTRADER,”
Downstream Gas is able to develop automated trading strategies around
the clock for the European gas market with the help of algorithms. The
digitalization of the entire company is supported by central IT platforms,
which are being expanded in stages across the group. With SAP S/4HANA,
we are introducing the latest SAP software and thereby securing the basis
for optimizing and automating our business processes.
Even in a digital world, our employees will remain at the heart of our
business. A lot of things will be easier, but also new and different. This is
why we want to grow an innovation-friendly corporate culture, technical
skills, and collaborations. With this in mind, we are also planning projects
as part of the Digital Journey through collaborations with Schlumberger
and other partners including start-ups and universities.
We intend to join the premier league in digitalization.
Maintain oil, grow gas –
in a responsible way.
As an oil and gas company, OMV operates in one of the world‘s most
challenging industries. Managing our company in a responsible way
requires us to reconcile an array of legitimate interests held by employees,
shareholders, the environment, and society as a whole. We address these
needs in our OMV Sustainability Strategy 2025. An integral part of our
corporate strategy has been defining 15 measurable targets under five
focus areas. These include determining the contribution we will make to
turning around climate trends and what we need to achieve in terms of
occupational safety, human rights, and innovations.
Until the day when replacement technologies are found that can come
close to meeting the growing demand for energy, we will not be able to
forgo oil. The decisive factor is using it as carefully and responsibly as
possible. This is what we refer to as “Oil & Gas at its best.” This means
that in future we want to refine more oil and burn less of it for energy
production. We process it into precursor products for the plastics industry
for critical medical, industrial, and everyday products. This is how we add
value for OMV, for our customers, and for the environment. What‘s more,
we serve as international trailblazers with our innovation projects. In our
ReOil® research project we recycle used plastics into valuable synthetic
crude for fuels and petrochemical applications. In our Co-Processing
project we produce more sustainable fuel without any reduction in quality
by including biogenic oils in processing in our refineries. We are an
international leader in Upstream with our Enhanced Oil Recovery methods.
Environmentally friendly production methods have allowed us to achieve
crude recovery rates that exceed international benchmarks, thereby
making better and more efficient ecological use of our production areas.
Across the group we are set to consistently enhance the carbon efficiency
of our operations and product portfolio. One significant factor here is to
drive up the share of gas to over 50 percent of our total production.
When it comes to employees, the issue of diversity is right at the top of
the agenda until 2025. We intend to increase the percentage of women at
management level from 18 percent in 2017 to 25 percent.
In 2018, OMV was the first and only
Austrian company to be listed on the
Dow Jones Sustainability Index.
Well equipped for all future drive technologies.
22
Sustainable production: producing high-value fuels and petrochemical applications from used plastics.
We want to increase our dividend year-on-year
or at least maintain it at the previous year‘s level.
Healthy and highly competitive
In 2018, OMV once again has proven that it is capable of creating
sustainable value. We achieved the highest earnings in the company‘s
history. The 2018 acquisitions in Abu Dhabi and New Zealand as well as
OMV‘s record dividend for the year 2017 were financed from cash flow.
A solid financial position, an increase in shareholder value, and attractive
returns for shareholders remain the guiding lights of our value-focused
finance strategy. As part of our progressive dividend policy, we want to
increase our dividend year-on-year or at least maintain it at the previous
year‘s level.
The combination of our strong cash flow and robust balance sheet
provides the basis for further growth and yet another reason to be excited
about tomorrow.
23
24
1TO OUR SHAREHOLDERS
25 – 40
26 — Interview with the Chairman of the Executive Board
30 — OMV Executive Board
32 — Report of the Supervisory Board
36 — OMV on the Capital Markets
OMV ANNUAL REPORT 2018 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD
“ OMV’s strategy proved to be
a key success factor.”
A conversation with Rainer Seele, Chairman of the Executive Board and
CEO of OMV, about the financial year 2018, OMV’s strategy – and about joy.
Mr. Seele, can joy actually be a factor in management?
I do think so. After all, it’s only when we do things with joy and enthusiasm that we do them
really well. Of course, it goes without saying that it’s not only my joy that matters, but the
joy of other people as well – the employees and the shareholders. Ultimately, what counts
is leading the Company to sustainable success and creating values that are of benefit to all:
to the Company and its owners, as well as to society.
What gave you the most joy in 2018?
To be honest, a lot of things. In March, we introduced the new “OMV Strategy 2025” and
started to execute it right away. Then, at the end of the year, a number of successful
activities were reflected in a highly gratifying figure: Our clean CCS Operating Result of
EUR 3.6 billion was the best result in the history of the Company. We are very pleased
about this, and I believe our shareholders are too, since, together with the Supervisory
Board, we will propose a dividend of EUR 1.75 per share to the Annual General Meeting –
that’s a record as well.
Was there also cause for concern during 2018?
The geopolitical situation is worrying me to a certain extent. Trade conflicts and threats
of sanctions are having an influence on the economic climate and the oil price is extremely
volatile. In 2018, it fell from its annual high of USD 86.2 in October to an annual low of
USD 50.2 at year end. In this challenging environment, OMV’s strategy proved to be a key
success factor. Our integrated upstream and downstream business model enabled us to
balance fluctuations in prices and the markets and to show an impressively stable profit-
ability. In addition, our measures to diversify our portfolio geographically are taking effect.
Today, OMV is far more resilient to regional conflicts than before.
You mentioned the new strategy. What is the status? How much have you already been able to
implement?
Together with our employees we have in fact already implemented the large majority of
our strategic initiatives. We have strengthened our integration, made progress with our
geographical diversification, and continued to streamline our portfolio with four acquisitions
and four divestments. We have also grown significantly. The two transactions in Abu Dhabi
underline our long-term commitment in the country of our second-largest core shareholder.
With our participation in Malaysia and the takeover of the Shell assets in New Zealand, we
have been able to establish Asia-Pacific as our fifth core region. We have now a broad inter-
national portfolio.
26
OMV ANNUAL REPORT 2018 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD
We have strengthened our
integration, made progress
with our geographical
diversification, and continued
to streamline our portfolio.
RAINER SEELE
Chairman of the Executive Board
In 2018, you paid all multi-billion acquisitions and the dividend out of your cash flow.
How do you do that?
It is essential to look at profitability and have costs under control. In the past year, we have
managed to reduce our production costs to USD 7 per barrel on average, and we have paid
close attention to profitability and short-term cash flows at every step of our growth. In
other words, as regards acquisitions we have concentrated on regions with low costs and
projects where operations were already up and running or where production was about
to begin. As a result, we were able to increase our operating cash flow to over EUR 4 billion
in 2018, while simultaneously laying the foundation for further growth. We will not only
maintain the strong position of last year, we will further grow it – in the medium term we
are aiming for an operating cash flow of over EUR 5 billion.
In the increasing debate on climate protection, criticism of oil and gas companies is growing
louder. How do you handle this?
By showing that we are making a contribution to climate protection. Last year, we presented
a Sustainability Strategy which is an integral part of our Corporate Strategy. We set our-
selves clear and measurable targets, also and particularly in the area of carbon efficiency.
By 2025, we will reduce the carbon intensity of our operations by 19 percent compared to
the 2010 levels. At the same time, we will also lower the carbon intensity of our product port-
folio by 4 percent – among others, due to the fact that we are focusing increasingly on gas.
You are known as a strong advocate of gas. Why?
Because gas is a real problem solver. I will give you two examples. With natural gas vehicles,
or more precisely with the use of CNG for passenger cars and LNG for trucks and long-
haul transportation, we could reduce carbon emissions from road transportation by at least
20 percent. And, if we were to switch from coal to gas for all power generation, we would
reduce carbon emissions by 50 percent. We wouldn’t even need to develop any new tech-
nology to do this. It could be implemented immediately. As a result, the demand for gas
27
OMV ANNUAL REPORT 2018 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD
will increase over the coming years. OMV is getting ready for this development. With
57 percent, we are already producing more gas than oil. And we’ll be continuing in this
direction.
Isn’t that just a short-term solution?
Quite the opposite. For a long time, gas was underrated as a bridging technology only.
The truth, however, is that gas not only provides a vital and immediate solution, but also
enables the storage and use of alternative energy resources on a large scale in the form
of power-to-gas technology. Thus, gas is actually a key pillar of the energy transition.
Shouldn’t a sustainability strategy include more than mere carbon efficiency?
I agree with you there. And, in fact, it does. We have defined areas beyond carbon effi-
ciency in which we want to improve. These include topics ranging from safety, health,
and environmental protection all the way to diversity, social responsibility, and innovative
energy solutions.
Can you give me some examples of concrete goals?
We want to raise the share of women at management level to 25 percent by 2025, for
example. And by the way, that’s not just so as to solve the gender inequality issue. It would
quite simply be foolish not to use the enormous potential of female employees. In addition,
over the same period we will be investing up to EUR 500 million in developing innovative
energy solutions for a low-carbon future.
What innovations do you have in mind?
I’m primarily thinking of our ReOil® project. We are in the pilot phase of this project and the
operation of our pilot plant is very promising.
What is the project about?
To put it simply, the ReOil® process converts plastic waste back into premium synthetic crude
oil that can be further processed to create fuels or high-quality plastics. We hold patents in
all key markets for this specialized process, which we have developed.
There is constant talk of a world without oil. What do you think about that?
I do not consider that realistic, nor even feasible, based on current knowledge. While the
demand for fossil fuels for road travel will decline, heavy goods and air traffic will not be
able to manage without oil and gas. And think of petrochemicals. Just look around you.
Virtually all everyday products contain high-performance petroleum-based materials. Prac-
tically everything that surrounds us, everything we use, is based in one form or another
on oil as feedstock. Oil is a valuable resource, which will increasingly be refined and burned
less in future.
28
OMV ANNUAL REPORT 2018 / INTERVIEW WITH THE CHAIRMAN OF THE EXECUTIVE BOARD
Plastics, too, are increasingly the target of criticism
Now, here we need to distinguish between the material itself and the partially unsatisfactory
management of its disposal. In addition, I’m thinking of premium plastics that are needed,
for example, for lightweight construction of electric vehicles or for medical devices. Plastics
are used in the area of renewable energies as well, for example, for the coatings of wind
turbines or the production of solar panels. At the end of their life cycle, we can use our ReOil®
process to turn plastic waste back into crude oil and establish an environmentally friendly
circular economy.
Do you believe that the demand for oil and gas will continue to increase?
Yes, that’s what I believe. The International Energy Agency figures speak for themselves.
However, there are likely to be different trends on different continents. Here in Europe
we will find that demand differs from that in Asia, for example. Asia is one of the largest
growth markets for our industry. That’s why we have invested there by establishing an
upstream venture in Malaysia with our local partner Sapura, which produces gas for the
regional market.
Is the downstream market in Asia attractive for you, as well?
Yes, it is a highly interesting market for us. However, we will supply it with the refining
capacities in the Middle East, which we have acquired recently. Here I am referring to the
acquisition of a 15 percent share in ADNOC Refining and a yet-to-be-established global
trading joint venture in Abu Dhabi. This transaction reflects the entire logic of our Strategy
2025 in a single project. We are participating in one of the world’s largest and best refining
assets and increasing our refining capacities by 40 percent at one stroke. As a result, we are
represented in Abu Dhabi from the well to petrochemicals, in other words, from production
to refining of the crude oil throughout the entire value chain. And 70 percent of production
is exported, above all, to the growth market Asia.
What can we expect from OMV in the coming year?
OMV will continue its path of profitable growth. In the past year, we have achieved important
milestones of our strategy. In Upstream, we already have a project pipeline that will allow
us to expand production to 500,000 barrels a day in 2019, provided the situation in Libya is
stable. Now, we want to concentrate on the development of these projects and the closing
of the already announced acquisitions. This relates to our entry in ADNOC Refining in Abu
Dhabi and our participation in Achimov 4/5 in Russia. At present, there are no further large-
scale transactions on our agenda. Similarly, Downstream will again support our commercial
success in 2019. The utilization rate of our refineries will be above the level of the previous
year, and we will further increase sales volumes in the gas business.
Vienna, March 2019
Rainer Seele m.p.
29
Reinhard Florey
Chief Financial Officer
Manfred Leitner
Executive Board member
Downstream
Johann Pleininger
Deputy Chairman of the Executive Board
Executive Board member Upstream
OMV
Executive
Board
Rainer Seele
Chairman of the Executive Board
Chief Executive Officer
Johann Pleininger
Deputy Chairman of the Executive Board
Executive Board member Upstream
OMV ANNUAL REPORT 2018 / REPORT OF THE SUPERVISORY BOARD
Dear Shareholders,
It is with great satisfaction that I look back on an extraordinarily successful 2018. This past
financial year, OMV distinguished itself not only with an exceptional financial performance,
but also with the decisive steps the Company has taken in implementing its long-term
Corporate Strategy.
Key milestones were achieved: OMV was able to expand and further internationalize its
successful integrated business model in line with the strategy unveiled in early 2018.
Thereby, OMV is preparing to meet future challenges and strengthens its competitive
ability and profitability. The successful financial performance during the past year made
a crucial contribution to implementing OMV’s growth path. Thanks to the best Clean CCS
Operating Result in its history, the Company was able to generate a positive free cash
flow after dividends in spite of the completed major acquisitions. OMV’s strong financial
position is also reflected in the proposed record dividend of EUR 1.75 per share, by means
of which you, dear shareholders, partake in OMV’s successes.
In the following, I would like to inform you about the Supervisory Board’s work during the
2018 financial year.
Composition of the Executive Board and Supervisory Board
With the extension of Reinhard Florey’s mandate in May 2018, the Executive Board affirmed
the composition of the executive team. The period of tenure for Reinhard Florey was
extended by two years until June 2021. Following the resignations of Murtadha Al Hashmi
and Ahmed Matar Al Mazrouei, the Annual General Meeting on May 22, 2018, elected
Alyazia Ali Al Kuwaiti and Mansour Mohamed Al Mulla to the Supervisory Board. Alyazia
Ali Al Kuwaiti was named the second Deputy Chairperson of the Supervisory Board. I,
Peter Löscher, announced in September 2018 that I will step down at the conclusion of the
Annual General Meeting in May 2019.
In March 2018, the employee representatives nominated Angela Schorna, who will serve
her first term on the Supervisory Board. Wolfgang Baumann resigned from the Supervisory
Board at the same time.
Supervisory Board activities
The Supervisory Board carried out its activities during the financial year with great care and
in accordance with the law, the Company’s Articles of Association, and the Internal Rules.
It oversaw the Executive Board’s governance of OMV and advised it in decision- making pro-
cesses on the basis of detailed written and verbal reports as well as constructive discussions
between the Supervisory Board and the Executive Board. The Executive Board provided
the Supervisory Board with regular, timely, and comprehensive reports on the Company’s
operations, on the general economic situation in its key markets, and the overall business
environment, as well as on the opportunities and risks to OMV’s business development.
32
OMV ANNUAL REPORT 2018 / REPORT OF THE SUPERVISORY BOARD
OMV was able to expand
and further internationalize
its successful integrated
business model.
PETER LÖSCHER
Chairman of the Supervisory Board
OMV successfully continued its growth path into the 2018 financial year and made significant
progress in implementing its strategic goals. The Supervisory Board’s activities were there-
fore particularly focused on evaluating possibilities for major invest ments and acquisitions.
The offshore concession agreement signed at the beginning of the year with ADNOC for two
oil fields in Abu Dhabi will supplement reserves and increase production, which represents
a considerable contribution toward meeting the strategic goals. By signing another conces-
sion agreement in December 2018 for offshore gas fields in Abu Dhabi, OMV also strength-
ened its cooperation with ADNOC along the value chain in the gas business.
The Supervisory Board also intensively dealt with the acquisition of a 15% interest in ADNOC
Refining and a yet-to-be-established global trading joint venture. The relevant agreement
was signed at the start of 2019. OMV is now in a position to build a competitive, integrated
refinery and petrochemical center around ADNOC’s already existing refinery facilities.
OMV is intent on establishing Asia-Pacific as one of its new core regions. Important mile-
stones in this process have been reached: OMV took over Shell’s Upstream business in New
Zealand and created a joint venture with Sapura Energy.
Activities of Supervisory Board committees
In addition to preparing the decision regarding the extension of Reinhard Florey’s mandate,
the Presidential and Nomination Committee placed particular focus on the issue of long-
term Executive Board succession planning during the 2018 financial year.
33
OMV ANNUAL REPORT 2018 / REPORT OF THE SUPERVISORY BOARD
The continuous training program for members of the Supervisory Board developed in the
prior year by the Presidential and Nomination Committee was implemented in the 2018
financial year. The program serves, among others, as a platform for lively exchange with
external experts on current topics relevant to the oil and gas industry.
The Remuneration Committee conducted a comprehensive external evaluation of the
Executive Board’s remuneration system in 2018. This included a revision of the variable
remuneration plans in line with market practice. In addition to regulatory requirements, the
latest developments on responsible and sustainable incentive setting were consid ered.
The introduction of a cap on total annual remuneration and a cus tomary malus mechanism
are especially noteworthy in this context. Particular attention was paid to simplifying
remuneration plans and representing data in the annual remuneration report in an even
more transparent manner.
This past financial year, OMV distinguished
itself not only with an exceptional finan -
cial performance, but also with the decisive
steps the Company has taken in imple-
menting its long-term Corporate Strategy.
In 2018, the Audit Committee looked at important topics related to accounting processes,
the internal audit program, risk management, and the Group’s internal control system.
The OMV Group’s auditor, Ernst & Young Wirtschaftsprüfungsgesell schaft m.b.H., participated
in each of the Audit Committee’s meetings, and the Supervisory Board regularly took
advantage of the opportunity to discuss matters with the auditor without the presence of
the members of the Executive Board.
Meetings of the Portfolio and Project Committee are held regularly prior to the meetings
of the Supervisory Board. The committee used its meetings in 2018 to prepare decisions
regarding key investment and M&A projects on the basis of extensive information and
intensive discussions. In addition, it repeatedly dealt with strategic considerations regarding
the long- term focus of the Company’s portfolio.
Further details regarding the activities of the Supervisory Board and its committees can be
found in the (consolidated) Corporate Governance Report.
34
OMV ANNUAL REPORT 2018 / REPORT OF THE SUPERVISORY BOARD
Annual financial statements and dividends
Following a comprehensive audit and discussions with the auditor during meetings of the
Audit Committee and the Supervisory Board, the Supervisory Board has approved the
directors’ report and the consolidated annual report pursuant to section 96(1) of the Austrian
Stock Corporation Act as well as the annual financial statements and the 2018 consolidated
annual financial statements pursuant to section 96(4) of the Stock Corporation Act. Both the
annual financial statements and the consolidated annual financial statements for 2018
received an unqualified opinion from the auditing company Ernst & Young Wirtschaftsprüf-
ungs gesellschaft m.b.H. The Supervisory Board also approved the (consolidated) Corporate
Governance Report audited by both the Super visory Board and the Audit Committee as
well as the (consolidated) report on payments to government agencies. The Supervisory
Board found no issues during the audits. Following the audit, the Supervisory Board
accepted the Executive Board’s proposal to distribute a dividend of EUR 1.75 per share and
to carry the remaining amount forward to new account. The Supervisory Board will audit the
separate consolidated non- financial report (sustainability report) individually, and this
report will be published separately and after the annual report together with the correspond-
ing Supervisory Board report.
The 2018 financial year was not only successful in financial terms – the major acquisitions
secured by OMV will shape the Company’s future lastingly. On behalf of the entire Super-
visory Board, I would like to thank the Executive Board and all employees for their commit-
ment and successful work in the 2018 financial year. I would like to give special thanks
to OMV’s shareholders for their continued trust as well as to all of OMV’s customers and
partners.
Vienna, March 13, 2019
For the Supervisory Board
Peter Löscher m.p.
35
OMV ANNUAL REPORT 2018 / OMV ON THE CAPITAL MARKETS
OMV on the Capital Markets
2018 was a challenging year for European equity markets, as trade tensions and geopolitical uncertainty
hit market sentiment and performance. All country indexes across Europe were down through 2018,
with the vast majority seeing double-digit declines. OMV stock closed the year at EUR 38.25, a 28% de-
cline compared to year-end 2017.
Financial markets
A surge in trade tensions and geopolitical events
has been one of the forces behind market weak-
ness in 2018, increasing concerns around future
global economic growth. In Europe, practically all
sectors declined through 2018, with cyclical sectors
underperforming. The UK’s departure from the EU
remained as unclear as ever. The likelihood of a no-
deal Brexit increased, hurting investor sentiment,
in particular towards the UK and Ireland. On the
continent, political turmoil has been on the rise as
well, most notably in Italy, where the new govern-
ment announced ambitious spending plans, and
in France, which was hit by weeks of protests. Like-
wise, it has been a volatile year for oil prices. In
2018, the market saw some of its highest prices in
almost four years along with some of the largest
single-day drops. Oil prices fell to their lowest levels
since October 2017. Accordingly, oil and gas stocks
were characterized by high volatility. While some
oil and gas equities showed a strong upward move-
ment, others experienced a downturn. On average,
however, oil and gas stocks were down slightly.
At a glance
Number of outstanding shares 2
Market capitalization 2
Volume traded on the Vienna Stock Exchange
Year’s high
Year’s low
Year end
Earnings Per Share (EPS)
Book value per share 2
Cash flow per share 3
Dividend Per Share (DPS) 4
Payout ratio
Dividend yield 2
Total Shareholder Return (TSR) 5
in mn
in EUR bn
in EUR bn
in EUR
in EUR
in EUR
in EUR
in EUR
in EUR
in EUR
in %
in %
in %
2018
326.73
12.50
9.13
56.24
37.65
38.25
4.40
36.44
13.45
1.75
40
4.58
(25)
2017
326.50
17.29
8.84
54.14
32.37
52.83
1.33
34.35
10.56
1.50
113
2.84
61
2016
2015
326.45
10.96
6.04
34.78
21.45
33.56
(1.24)
33.44
8.82
1.20
n.m.
3.58
34
326.36
8.53
7.13
30.46
20.70
26.13
(3.37)
35.76
8.68
1.00
n.m.
3.83
24
2014 1
326.26
7.18
5.21
36.06
20.07
22.01
0.85
35.53
11.24
1.25
147
5.68
(34)
1 As of 2015, figures for 2014 were adjusted according to IAS 8
2 As of December 31
3 Cash flow from operating activities
4 2018: as proposed by the Executive Board and confirmed by the Supervisory Board; subject to confirmation by the Annual General Meeting 2019
5 Assuming reinvestment of the dividend
36
OMV ANNUAL REPORT 2018 / OMV ON THE CAPITAL MARKETS
OMV share price performance and volume
OMV shares closed the year down 28% compared
to the previous year’s close. Assuming dividend
reinvestment, the total shareholder return was
minus 25%. OMV’s share price started the year at
EUR 52.83 and climbed to a high for the year of
EUR 56.24 on January 10. Subsequently, OMV’s
share price declined, falling below the EUR 50 level
in February before starting to recover through
April. In the second half, OMV stock followed a
downward trajectory, hitting a low of EUR 37.65 on
December 27 and closing the year at EUR 38.25.
The daily trading volume of OMV shares in 2018
averaged 385,176 (2017: 407,689). At the end of
2018, OMV’s total market capitalization was at
EUR 12.5 bn compared to EUR 17.3 bn at the end
of 2017.
OMV share price performance 2018 (based on 100)
EUR 56.24
60
55
50
EUR 52.83
45
40
35
30
EUR 38.25
EUR 37.65
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
OMV shares underperformed benchmark indexes
and peers in a negative market environment,
after having strongly outperformed the market in
2017. In 2018, the Austrian ATX gave up 20% of
its value. Over the same period, the FTSEurotop 100
global industry benchmark tumbled 13%, while
FTSEurofirst E300 Oil & Gas fell by 5%. Measured
over a five-year period, the return generated by
OMV shares outperformed index returns. An inves-
tor who acquired OMV stock worth EUR 100 at
the end of 2013 and reinvested the dividends in addi-
tional shares saw the value of their investment
increase to EUR 132 at the end of 2018, an average
annual return of 5.7%.
OMV shares: long-term performance compared with indexes
Average annual increase with dividends reinvested 1
OMV
ATX
FTSEurotop 100
FTSEurofirst E300 Oil & Gas
5.7%
7.7%
7.7%
4.1%
3.1%
6.7%
4.4%
11.6%
10 years (December 31, 2008, to December 31, 2018)
5 years (December 31, 2013, to December 31, 2018)
1 Based on the Total Return Index (RI) from Datastream; compound annual growth rate method used to calculate the average annual increase with
dividends reinvested
37
OMV ANNUAL REPORT 2018 / OMV ON THE CAPITAL MARKETS
Proposed dividend of EUR 1.75 per share
for 2018
Shareholder structure
In %
On May 22, 2018, OMV’s Annual General Meeting
approved a dividend of EUR 1.50 per share for
2017 as well as all other agenda items including
the Supervisory Board elections, the Long Term
Incentive Plan 2018, and the Matching Share Plan
2018. The Executive Board will propose a dividend
of EUR 1.75 per share for 2018 at the next ordinary
Annual General Meeting on May 14, 2019, an in -
crease of 17% over the previous year. The dividend
yield, based on the closing price on the last trading
day of 2018, amounts to 4.58%.
Dividend policy
OMV is committed to delivering an attractive and
predictable shareholder return through the busi-
ness cycle. According to its dividend policy, OMV
aims to increase dividends every year or at least to
maintain the level of the respective previous year.
OMV shareholder structure
OMV’s shareholder structure remained relatively
unchanged in 2018 and was as follows at year end:
43.0% free float, 31.5% Österreichische Beteiligu-
ngs AG (ÖBAG, representing the Austrian govern-
ment) 1, 24.9% Mubadala Petroleum and Petrochem-
icals Holding Company (MPPH), 0.4% employee
share programs, and 0.2% treasury shares.
0.4
0.2
7.2
7.7
31.5
327 mn
shares
28.1
24.9
ÖBAG
MPPH/Abu Dhabi
Institutional investors
Unidentified free float
Identified retail ownership/
brokerage & trading accounts
Employee share programs
Own shares
31.5
24.9
28.1
7.7
7.2
0.4
0.2
An analysis of our shareholder structure carried
out at the end of 2018 showed that institutional
investors held 28.1% of OMV’s shares. At 32%,
investors from the United States made up the larg-
est regional group of institutional investors. The
proportion of investors from the United Kingdom
amounted to 21%, while shareholders from France
held 11%. Norwegian and Austrian owership
account for 5% each.
Geographical distribution of institutional investors
In %
8
21
32
28.1%
institutional
investors
11
5
5
18
United Kingdom
France
Norway
Austria
Rest of Europe
United States
Rest of world
21
11
5
5
18
32
8
1 With effect as of February 20, 2019, Österreichische Bundes- und Industriebeteiligungen GmbH was transformed into a joint-stock company and
renamed as Österreichische Beteiligungs AG.
38
OMV ANNUAL REPORT 2018 / OMV ON THE CAPITAL MARKETS
The capital stock of OMV Aktiengesellschaft amounts
to EUR 327,272,727 and consists of 327,272,727 no-
par-value bearer shares. At year-end 2018, OMV
held a total of 542,151 treasury shares. The number
of shares in free float was therefore 326,730,576.
The capital stock consists entirely of common
shares, and due to OMV’s adherence to the one-
share, one-vote principle, there are no classes of
shares that bear special rights. A consortium agree-
ment between the two major shareholders, ÖBAG
and MPPH, contains established arrangements for
coordinated action and restrictions on the transfer
of shareholdings.
Environmental, Social, and Governance
(ESG) performance
OMV places great importance on working with
ESG rating agencies. OMV aims to act responsibly
towards the environment and society, which has
been reflected in further improvement of its ESG
rating in 2018. OMV joined the Dow Jones Sustain-
ability Index (DJSI), being the only Austrian compa-
ny included. The inclusion places OMV among
the top 10% oil and gas companies in terms of ESG.
Launched in 1999, the DJSI World represents the
gold standard for corporate sustainability and is the
first global index to track the leading sustainability-
driven companies.
OMV reached Prime Status according to ISS-oekom
rating, with B– score. This positions the company
among 5% of the best ESG performing oil & gas
companies, according to the rating. Besides these
outstanding achievements, OMV has maintained
its inclusion in several ESG indexes. OMV received
the highest “AAA” score from MSCI Global Sus-
tainability Index for the sixth year in a row. OMV
was reconfirmed as a constituent of two MSCI
indexes: ACWI ESG Leaders Index and ACWI SRI
Index. Furthermore, OMV was reconfirmed as a
member of the FTSE4Good Index Series, which are
used by a wide variety of market participants to
create and assess responsible investment funds. In
2018, OMV achieved an outstanding CDP score of
A– (leadership) for Climate Change. OMV maintained
its inclusion in the STOXX® Global ESG Leaders
and ECPI® indexes. After another assessment by
EcoVadis – a platform analyzing ESG performance
of suppliers – OMV maintained its Silver supplier
status.
Good credit ratings
The OMV Group is evaluated by rating agencies
Moody’s and Fitch. On May 21, 2018, Moody’s
upgraded OMV’s issuer rating from Baa1 to A3 with
a stable outlook. This reflects the improved busi-
ness profile following the transformation process
over the last two years as well as OMV’s strong
financial health. Fitch confirmed OMV’s rating of
A– with a stable outlook on June 7, 2018.
Analyst coverage
At the end of 2018, OMV was covered by 21 finan-
cial analysts who regularly publish research reports
on OMV. This ensures OMV good visibility in the
financial community. At the end of 2017, about one-
quarter of these analysts had issued a “sell” rec-
ommendation, with the remainder equally split
between “hold” and “buy.” At the end of 2018, none
of the analysts recommended selling OMV shares
and almost three-quarters gave OMV a “buy” rating.
The average target price valuation increased from
EUR 52 per share last year to EUR 58 at the end of
2018.
Investor Relations activities
Ensuring active, candid dialogue with the capital
market is a top priority at OMV. It is Investor Rela-
tions’ mission to provide comprehensive insight
into OMV’s strategy and business operations to all
capital market participants, thereby guaranteeing
equal treatment of all stakeholders. Throughout
2018, OMV was in constant dialogue with investors
and analysts, and hosted a Capital Markets Day in
London to present the OMV Strategy 2025. Two
investor group visits and one analyst group visit in
Austria provided insights into OMV’s Upstream and
Downstream activities. Finally, the Executive Board
and the Investor Relations department strength-
ened and deepened relationships with analysts and
investors through numerous road shows and con-
ferences across Europe, North America, and Asia.
39
40
2DIRECTORS’ REPORT
41 – 82
42 — About OMV
43 — Strategy
48 — Sustainability
51 — Health, Safety, Security, and Environment
53 — Employees
56 — OMV Group Business Year
64 — Upstream
71 — Downstream
76 — Outlook
77 — Risk Management
80 — Other Information
About OMV
OMV’s market
capitalization
amounted
to EUR 12.5 bn
OMV produces and markets oil and gas, innovative energy, and high-end petrochemical solutions – in
a responsible way. OMV has a balanced international Upstream portfolio, while its Downstream Oil and
Gas businesses feature a European footprint. In 2018, Group sales amounted to EUR 23 bn and year-
end market capitalization was about EUR 12.5 bn. The majority of OMV’s 20,231 employees work at its
integrated European sites.
In the Upstream Business Segment, OMV focuses
on the exploration, development, and production of
oil and gas in its five core regions of Central and
Eastern Europe, Russia, the North Sea, Middle East
and Africa, and Asia-Pacific. At the end of 2018,
OMV had proven reserves (1P) of 1.27 bn boe and
proven and probable reserves (2P) of 2.16 bn boe.
The Reserve Replacement Rate (RRR) was 180% in
2018. Daily production was 427 kboe/d in 2018
(2017: 348 kboe/d), which equals a total production
of 156 mn boe. While gas production accounted for
57% of production, oil amounted to 43%.
OMV is one of
Austria’s largest listed
industrial companies
The Downstream Business Segment consists of the
Downstream Oil and the Downstream Gas busi-
nesses. Downstream Oil operates three refineries:
Schwechat (Austria) and Burghausen (Germany),
both of which feature integrated petrochemical pro-
duction, and the Petrobrazi refinery (Romania),
which mainly processes Romanian crude. OMV has
an annual processing capacity of 17.8 mn t. The
total refined product sales were 20.26 mn t in 2018
(2017: 23.82 mn t). The retail network consists of
2,064 filling stations in ten countries with a strong
multibrand portfolio.
In Downstream Gas, the natural gas sales volume
was 113.8 TWh in 2018 (2017: 113.4 TWh). OMV owns
gas storages facilities with a capacity of 30 TWh
and a 51% share in Gas Connect Austria, operating
a 900 km natural gas pipeline network. The Cen tral
European Gas Hub (CEGH) is a well-established
gas-trading platform. The node in Baumgarten
(Austria) is Central Europe’s largest entry and dis-
tribution point for Russian gas. OMV operates a gas-
fired power plant in Romania.
Our value chain
Upstream
Downstream Oil
Onshore and offshore exploration
and production
Supply
Refining
Storage
Transportation
and distribution
Domestic
Industry
Filling
stations
and
services
Petro-
chemicals
Industry
Downstream Gas
Pipeline
Storage
Pipeline
Domestic
Gas-fired
power plants
Industry
42
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Strategy
The OMV Strategy 2025 builds on the proven concept of integration. Based on a balanced growth strategy
in Upstream and Downstream, the size and geographical reach of OMV will be expanded considerably
to participate in attractive growth opportunities outside of Europe. OMV strives to substantially increase
the clean CCS Operating Result to at least EUR 5 bn by 2025. Since the strategy was introduced in
March 2018, significant milestones have already been reached.
Market outlook
Global energy demand continues to grow and will
be met predominantly through traditional energy
sources.
World energy demand by primary energy sources
In bn toe
14.0
2.0
0.7
3.8
4.4
3.1
15.4
16.2
2.5
0.8
3.8
4.8
3.5
2.9
0.8
3.8
4.8
3.8
2017
2025
2030
Gas
Coal
Oil
Nuclear
Renewables
Source: IEA New Policies Scenario, World Energy Outlook 2018
Global energy demand will continue to increase
and is expected to rise by 16% by 2030, driven by
GDP and population growth. Oil and gas demand
continues to rise and will account for more than
50% of global energy demand. Natural gas will be
the strongest-growing primary energy source
among fossil fuels.
Oil will remain the main source of primary energy
in the next decade with a share of about 30% and a
compound annual growth rate of 0.7% up to 2030.
The increase in consumption will mainly stem
from countries in Asia, the Middle East, and Africa.
The growth in demand for crude oil is the result
of increased demand for products from the petro-
chemical industry and the transportation sector
in these emerging markets. While demand for
crude oil products is forecast to develop negatively
in saturated markets such as North America and
Northwest Europe, the global growth in demand
beyond 2030 will come from the emerging markets
in Asia, Africa, and the Middle East.
Oil and gas demand
will continue to
increase in the next
decade
Natural gas will be the strongest-growing primary
energy source among fossil fuels, supported by a
decarbonization policy and stricter emissions stan-
dards. Gas demand will grow at an annual rate of
1.6% up to 2030. Demand for power generation as
the main gas-consuming sector will expand further
throughout the world, including Europe, replacing
power generation from coal.
The growth in global demand for petrochemical
products is tied to the general development of the
economy. The growing petrochemicals market will
also be an important consumer of oil and gas. Ole-
fins such as ethylene, propylene, and butadiene
are major building blocks for the chemical industry.
Their derivatives, such as polyolefins, offer unique
properties and economic benefits such as low
material costs, as well as easy and fast processing.
Petrochemicals are increasingly used, substituting
other energy-intensive materials due to their advan-
tageous characteristics. They are essential for
various industries such as packaging, construction,
transportation, healthcare, pharmaceuticals, and
electronics.
This growth will be primarily driven by Asia-Pacific,
following the economic development in the region.
Demand in mature markets such as Europe, North
America, and Japan will continue to stay healthy
and develop in line with GDP.
Naphtha, an oil derivative product, is expected to
remain the main feedstock for the petrochemical
industry. Other feedstocks include coal, primarily
in China, associated gas in the Middle East, and
shale gas in North America.
Strategic cornerstones – OMV set to
become bigger and more valuable
The OMV Strategy 2025 builds on the proven con-
cept of integration, which ensures strong cash flows
and resilience. OMV aims to grow both the Upstream
and the Downstream business. In Upstream, we
target production and reserves growth in defined
core regions. In Downstream, the processing capac-
ities and the geographical reach of OMV will be
expanded considerably. Moreover, OMV will build
Strategy 2025 expands
on the proven concept
of integration on
an international level
43
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Increase clean
CCS Operating Result
to at least EUR 4 bn
by 2020 and at least
EUR 5 bn by 2025
Upstream reserves
to almost double
to more than
2 bn boe by 2025
a strong gas market presence in Europe. We will
continue to improve our performance and extend
our record of operational excellence. OMV strives
to increase the clean CCS Operating Result to at
least EUR 4 bn by 2020 and at least EUR 5 bn by
2025.The growth will be driven equally by Upstream
and Downstream and will be achieved both organ-
ically and through acquisitions. Strategic partner-
ships will remain an important lever to access attrac-
tive projects, with long-term perspectives and value
creation.
Upstream
OMV Upstream will generate profitable growth by
increasing quality of the portfolio, while remaining
focused on cash generation. The target production
levels of 500 kboe/d and 600 kboe/d in 2020 and
2025, respectively, are reaffirmed. Production will
ensure more than 50% natural gas in the future to
improve long-term carbon efficiency and adapt to
the changing mix in global energy demand. To en-
sure a Reserve Replacement Rate of more than 100%
(three-year average) and an average reserve life of
eight to ten years in the long term, 1P reserves will
almost double to more than 2 bn boe by 2025. Port-
folio growth will be achieved primarily through
acqui sitions in low-cost, hydrocarbon- rich regions,
but also through organic exploration and invest-
ments. Average production costs will not exceed
USD 8/boe. Strict cost management, a focus on
profitability, and prudent capital discipline will be
of utmost importance as we take steps to reach
these targets.
OMV will continue to focus its portfolio on five core
regions. Port folio expansion is being pursued with
projects in OMV’s core regions, with partic u lar focus
on the Middle East and Africa, Russia, and Asia-
Pacific to ensure sustainable replacement with low-
cost barrels and improve the Company’s overall
resilience.
Strategic partnerships with long-term value creation
prospects will continue to be an important pathway
for OMV to access material volumes of oil and gas
reserves. Working together with selected national
oil companies as well as with strong international
oil companies supports our expansion into our
core regions and bolsters our technological capabil-
ities, while also minimizing operational and finan-
cial risks.
OMV Upstream is planning to invest between
EUR 1.3 and 1.7 bn annually for organic growth and
operations until 2025. OMV will increase its annual
budget for exploration and appraisal activities from
EUR 300 mn (2018) to EUR 350 mn in 2019 in line
with the growing necessity to replace produced
reserves. This translates into 15 to 20 exploration
drillings to be expected per year.
OMV – Strategy 2025
Leverage on proven concept of integration
Significantly internationalize
Upstream and Downstream
Build strong gas market presence in Europe
Drive operating result
44
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Upstream – strategic achievements
Since the announcement of the OMV Strategy 2025
in March 2018, we have made major progress in
implementing our strategy. The highlights are sum-
marized below:
Malaysia
Acquired a 50% stake in a new joint venture
company named SapuraOMV Upstream for
USD 540 mn and USD 85 mn future contingency
payment
Generated strong earnings with a clean
Operating Result of EUR 2.0 bn in 2018
260 mn boe of life of field production, 90% gas
Plateau production of ~ 60 kboe/d (100%)
expected by 2023
Gas production increased to 57% of the total
SapuraOMV Upstream expected to be free
portfolio
Production costs reduced to USD 7/boe in 2018
Fast-track strategy execution: high-quality
portfolio expanded through acquisitions in
New Zealand, United Arab Emirates (UAE),
and Malaysia
Asia-Pacific is developed into a core region
following the expansion in New Zealand and the
acquisition of a 50% stake in a new joint ven-
ture company in Malaysia named SapuraOMV
Upstream
Three-year average Reserve Replacement Rate
increased to 160%
1P reserves base increased to 1.3 bn boe at
year-end 2018
Landmark transactions
New Zealand
Expanded footprint by increasing stake in
existing assets for a price of USD 579 mn
Adding up to 100 mn boe of recoverable
resources
Immediate production contribution at closing
Strong free cash flow contribution
OMV has capitalized on its experience in
New Zealand since 1990 to increase the oil
and gas recovery rates.
Abu Dhabi
Acquired a 20% stake in two oil fields in
Abu Dhabi for USD 1.5 bn
Greenfield developments with huge reserves
of 450 mn boe
Long term plateau of 43 kboe/d from 2023
Long term stable and substantial free cash
flow contribution
Strengthening strategic partnership with
ADNOC and building material position in one of
the world’s richest regions in hydrocarbons
cash flow positive in 2020
OMV capitalizes on the increasing LNG demand
and growing Asian markets.
SapuraOMV Upstream will be the platform
for further regional growth.
Downstream Oil
In Downstream Oil, OMV will further strengthen its
competitive position in Europe. OMV will modify
its European refining assets by reflecting expected
demand changes and shifting to higher-value prod-
ucts. By 2025, up to EUR 1 bn will be invested in
the refineries in Austria, Germany, and Romania.
More than 50% of the investments will be used to
expand OMV’s position in the petrochemical sec-
tor. The three sites will continue to be operated as
one integrated refinery system, optimizing asset
utilization and maximizing margins through the ex-
change of intermediate products. OMV is well posi-
tioned to capture the benefits of marine fuel market
changes in 2020 from new IMO regulations. OMV’s
site flexibility allows to further reduce its low heavy
fuel oil yield of 2% with no additional investments
by 2020. Western refineries will become heavy fuel
oil free by 2025.
The retail business will increase fuel sales in the
premium and discount segments. The number of
discount stations will be expanded in Austria, Ger-
many, and Slovenia. The concept will be tested in
Hungary. The focus of the premium retail network
is on increasing the market share of the premium
product “MaxxMotion” as well as developing addi-
tional customer-oriented service and shop offer-
ings. In order to safeguard revenue and profitability
in Europe, OMV will increase the share of our
refineries’ production sold through captive sales
channels from 47% to 55% by 2025. This will ensure
resilience and a refinery utilization rate of over
90% in the long term, which is well above the aver-
age in Europe.
Excellently positioned
to capture signifi -
cant upside from new
IMO regulations
45
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Downstream Oil
to export successful
European refining
and petrochemical
business model to
international growth
markets
Building on our strong expertise as one of Europe’s
leading refiners, we strive to export our successful
European refining and petrochemical business
model to international growth markets. By 2030,
fuel demand is expected to grow significantly in
Asia, as well as in the Middle East and Africa. Petro-
chemicals demand is set to increase in all regions,
especially in Asian markets. Overall, Asia will ab-
sorb more than 90% of the growth in global oil
demand. Thus, OMV aims to nearly double its refin-
ing capacity by 2025, establishing one to two core
regions outside Europe.
Downstream Oil – strategic achievements
Since the announcement of the OMV Strategy 2025
in March 2018, we have made major progress in
implementing our strategy. The highlights are sum-
marized below:
Strong contribution to Group financials with a
clean CCS Operating Result of EUR 1.6 bn
Fast-track strategy execution: signed acquisition
of a 15% interest in ADNOC Refining and in a
to-be established Trading Joint Venture at the
end of January 2019
Increased share of refineries’ production sold
through captive sales channels to 49% supported
by storage tank acquisitions and an increased
number of discount filling stations
Utilization rate of the refineries of 92% achieved,
despite a six-week planned turnaround at the
Petrobrazi refinery
ReOil®: fuel production from waste plastic
facility developed from an R&D phase into a
pilot project integrated into our refinery
Landmark transactions: OMV becomes
shareholder in ADNOC Refining
Signed acquisition of a 15% interest in ADNOC
Refining and in a to-be established Trading Joint
Venture
Refining complex is situated in Ruwais, in the
United Arab Emirates
Decisive step taken to grow the Downstream Oil
business beyond Europe
OMV becomes strategic partner in the 4th larg-
est refinery in the world, integrated into petro-
chemicals, with a total capacity of 922 kbbl/d
Increase in OMV’s refining and petrochemical
capacity by around 40% and 10%, respectively
OMV will be part of an already profitable busi-
ness with strong domestic sales and access to
attractive markets such as Asia-Pacific
Future significant value creation from organic
and self-funded growth
Further increase in profitability through OMV’s
world-class operational and commercial expertise
Downstream Gas
OMV will become the leading integrated supplier
with a strong market presence from Northwest to
Southeast Europe. By 2025, OMV gas sales will
grow to more than 20 bcm, thereby aiming at a
10% market share in Germany, Europe’s largest gas
market. OMV will increasingly market natural gas
from own upstream production as well as imported
gas volumes. European demand for natural gas is
expected to remain stable until 2030, with upside
potential of 40 bcm primarily driven by a switch
from coal to natural gas in power generation. In the
same time period, European natural gas production
is rapidly declining, causing an increasing supply
gap that needs to be filled. In this environment,
OMV’s integrated position in the European market
will be strengthened by rising equity gas volumes
from projects in Norway and Romania and long-
term supply contracts with Gazprom.
The Nord Stream 2 pipeline is advantageous for
OMV’s gas strategy and will secure as well as in-
crease consistent and reliable long-term gas sup-
plies to Europe and the Central European Gas Hub
in Baumgarten, Austria.
46
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Downstream Gas – strategic achievements
Since the announcement of the OMV Strategy 2025
in March 2018, we have made progress in imple-
menting our strategy. The highlights are summa-
rized below:
Gas sales in Germany increased by 50%,
reaching a market share of 2.6% in 2018
Successful market entry in the Netherlands
Extension of natural gas supplies from Russia
to Austria until 2040; increase in gas supplies
from Gazprom by 1 bcm per year
Divestment of the Samsun power plant
in Turkey
Finance
OMV’s value-driven finance strategy aims to enable
growth, drive performance, and reward share-
holders. A set of strategic and financial criteria are
taken into account when making an investment
decision. Growth will be executed on a solid finan-
cial base, with the following long-term targets
being the foundation of OMV’s finance strategy:
Positive free cash flow after dividends,
taking a progressive dividend policy into
account
Clean CCS ROACE of at least 12%
Increase clean CCS Operating Result
to at least EUR 4 bn by 2020 and to at
least EUR 5 bn by 2025
Increase cash flow generation 1 to above
EUR 5 bn in the mid term
Grow clean CCS net income attributable
to stockholders
Ensure financial stability through a maximum
gearing ratio of ≤ 30%
Maintain a strong “investment-grade”
credit rating
OMV aims to increase the clean CCS Operating
Result to at least EUR 4 bn by 2020 and to at least
EUR 5 bn by 2025. OMV targets attractive share-
holder returns and aims to increase dividends every
year or to at least maintain them at the respective
prior year’s level. Further growth will be enabled
through capital expenditures and acquisitions al-
ready communicated. For the period 2018 to 2025,
OMV plans to make annual investments averaging
EUR 2.0 to 2.5 bn. In addition, a total acquisition
budget of EUR 10 bn is planned, over a span of eight
years, to be split equally between Upstream and
Downstream.
Since the announcement of the Strategy 2025,
OMV has executed the vast majority of its efforts
to transform the company and deliver on our
strategy. The number of acquisitions in Upstream
and Downstream have substantially strengthened
the portfolio and its profitability. In the short and
medium term there are no further big acquisitions
planned, apart from the ones communicated
(i.e., the acquisition of a 24.98% stake in Achimov
4A/5A).
A set of strategic and financial criteria is taken into
account when making an investment decision.
Growth will be executed on a solid financial base,
with a gearing ratio lower than or equal to 30%,
while maintaining a strong investment-grade credit
rating. The financial strategy will drive performance
through its focus on cash, operational excellence,
and resilience of the portfolio. Furthermore, the Com-
pany will continue to enhance its operating effi-
ciency. The goal of the new efficiency program is to
reduce costs by EUR 100 mn in 2020 compared
with 2017.
In 2018, important milestones for the achievement
of long-term financial objectives were reached:
Clean CCS Operating Result increased from
EUR 3.0 bn in 2017 to EUR 3.6 bn in 2018
Free cash flow positive by year end after
dividends as well as after acquisitions
Clean CCS ROACE of 13%
Operating cost savings target of EUR 100 mn
achieved ahead of schedule in 2018
Strong balance sheet maintained, with a
gearing ratio of 13%
Record dividend payment of EUR 1.50 per share
Moody’s credit rating upgrade to A3 from Baa1
Operating cost savings
target of EUR 100 mn
achieved ahead of
schedule in 2018
1 Defined as sources of funds
47
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Sustainability
OMV responsibly delivers affordable energy for a sustainable supply: the energy for a better life.
Sustainable business behavior is crucial for OMV to create and protect value in the long term,
to build trust-based partnerships, and to attract customers as well as the best employees, investors,
and suppliers.
Carbon Efficiency: OMV focuses on improving the
carbon efficiency of its operations and product
portfolio. OMV is fully committed to acting on
climate change mitigation and responsible re-
source management. OMV targets:
Lower OMV’s carbon intensity of operations 3
by 19% by 2025 (vs. 2010)
Reduce the carbon intensity of OMV’s product
portfolio 4 by 4% by 2025 (vs. 2010)
Zero routine flaring and venting of associated
gas by 2030
Innovation: OMV’s innovation efforts focus on
optimizing production, exploring high-end petro-
chemical solutions, developing innovative energy
solutions, and embracing digital technologies.
Innovation is facilitated by investment and part-
ner ships in research and development of inno-
vative technological solutions. OMV targets:
Develop ReOil® into an industrial-scale pro-
cess (unit size of ~ 200,000 t per year) with
commercially viable economics
Raise the share of sustainable feedstock
co-processed in the refineries to ~ 200,000 t
per year by 2025
Increase the recovery factor in the CEE region
in selected fields by 5 to 15 percentage points
until 2025 through innovative Enhanced Oil
Recovery methods
Further details can be found in the Upstream (page 64)
and Downstream (page 71) chapters.
OMV’s approach to sustainability
In the era of energy transition, the goal of OMV’s
business is to provide “oil & gas at its best.” The
growing demand for energy and accelerating cli-
mate change pose immense challenges for the
energy sector. The key lies in finding the balance
between climate protection efforts, affordable
energy, and reliable supply. This means producing
and using oil and gas as sensibly and responsibly
as possible to safeguard the energy supply. We
pledge to conduct our business responsibly by pro-
tecting the environment, aiming to be an employer
of choice, and creating long-term value for our cus-
tomers, shareholders, and society.
In line with the sustainable approach to the busi-
ness, OMV has developed the Sustainability Strate-
gy 2025 as an integral part of OMV’s Corporate
Strategy 2025. The Strategy includes 15 measurable
targets set in the five focus areas: Health, Safety,
Security, and Environment (HSSE), Carbon Efficien-
cy, Innovation, Employees, as well as Business
Principles and Social Responsibility. For a lower-
carbon future OMV will invest up to EUR 500 mn by
2025 in innovative energy solutions such as ReOil®
and Co-Processing and will implement carbon effi-
ciency measures.
Health, Safety, Security, and Environment (HSSE):
Health, safety, security, and protection of the
environment have top priority in all activities.
Proactive risk management is essential for
realizing OMV’s HSSE vision of “ZERO harm –
NO losses.” OMV targets:
Zero work-related fatalities
Stabilize Lost-Time Injury Rate 1 at below
0.30 (per 1 million working hours)
Keep leading position for Process Safety
Event Rate 2
Further details can be found in the Health, Safety,
Security, and Environment chapter on page 51.
1 Lost-Time Injury Rate is the frequency of injuries leading to lost working days, relative to one million working hours of employees and contractors.
2 See Abbreviations and Definitions for definition of a Process Safety Event (PSE)
3 CO2 equivalent emissions produced to generate a certain business output using the following business-specific metric (Upstream: t CO2 equivalent/toe
produced, Refineries: t CO2 equivalent/t throughput, Power: t CO2 equivalent/MWh produced) consolidated to an OMV Group Carbon Intensity Opera-
tions Index, based on weighted average of business segments’ carbon intensity
4 OMV carbon intensity of product portfolio measures the CO2 equivalent emissions generated through usage of OMV’s products sold to third parties in
t CO2 equivalent/toe sold.
48
15 sustaina bility
targets
Investments of
up to EUR 500 mn
in innovative
energy solutions
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Share of natural gas
in the product
port folio increased
CDP Climate
Change score A–
Employees: OMV is committed to building and
retaining a talented expert team for international
and integrated growth. The focus of its diversity
strategy is on gender and internationality. OMV
targets:
Increase share of women at management
level 1 to 25% by 2025
Keep high share of executives with inter-
national experience 2 at 75%
Further details can be found in the Employees chapter
on page 53.
Business Principles and Social Responsibility:
OMV strives to uphold equally high ethical stan-
dards at all locations. OMV is a signatory to the
United Nations (UN) Global Compact, fully com-
mitted to the UN Guiding Principles on Business
and Human Rights, and aims to contribute to
the UN’s 2030 Agenda for Sustainable Develop-
ment. OMV targets:
Promote awareness of ethical values and prin-
ciples: conduct in-person or online business
ethics training courses for all employees
Assess Community Grievance Mechanism
of all sites against UN Effectiveness Criteria 3
by 2025
Conduct human rights training courses
for all employees exposed to human rights
risks 4 by 2025
Increase the number of supplier audits
covering sustainability elements to more
than 20 per year by 2025
Carbon efficiency performance
OMV recognizes climate change as one of the most
important global challenges. OMV integrates risks
and opportunities related to climate change impacts
into the development of the Company’s business
strategy and the planning of operational activities.
In this regard, OMV aims to reduce its carbon foot-
print in an effort to mitigate the impact of its oper-
ations and product portfolio on climate change. In
order to reduce the greenhouse gas (GHG) emis-
sions of its operations, OMV implements measures
aimed at optimizing its operational processes,
increasing energy efficiency, and reducing methane
emissions through leakage detection and improve-
ment of asset integrity. For example, as a result of
the Upstream Energy Efficiency Program at OMV
Petrom, 30 gas-to-power (G2P) and combined heat
and power plants (CHP) were installed. Phasing
out existing routine flaring and venting by 2030
forms part of OMV’s commitment to the World Bank
initiative “Zero routine flaring by 2030.”
OMV made substantial business decisions in 2018,
which will lead to a higher share of natural gas
in the OMV Upstream production portfolio. OMV
started the production of the mainly gas-based
assets of Aasta Hansteen in Norway, continued the
negotiations for the direct interest in the Russian
gas extraction of the Achimov 4A/5A gas formation
and will also benefit of the future gas production
of SapuraOMV Upstream in Malaysia. Additionally,
OMV extended the Russian natural gas supply
contracts until 2040. The higher share of natural gas
in OMV’s overall product portfolio will contribute
to the reduction of the product port folio’s carbon
intensity.
In 2018, OMV achieved for the third time in a row
an outstanding CDP Climate Change score of A–
(Leadership). With its CDP Climate Change score,
OMV is among eleven companies in the global
oil and gas sector that achieved a leadership score
and among the top four companies across all
sectors in Austria.
Business principles and social
responsibility performance
Business ethics and compliance
OMV has a Code of Business Ethics in place that
applies to all employees. A dedicated cross-regional
compliance organization, consisting of 29 compliance
experts, ensures that OMV standards are consis-
tently met across the Group. In 2018, 2,238 employ-
ees (2017: 688 employees) received in- person or
online business ethics training. The “Integrity Plat-
form” provides an anonymous whistle blowing
mechanism for OMV employees and external stake-
holders, such as suppliers, in relation to the issues
of non-compliance with the legal regulations, the
Code of Business Ethics, or other internal guide-
lines of the OMV Group.
1 Management level: executives and advanced career level
2 More than or equal to three years of living and working abroad
3 Legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, based on engagement and dialog
4 1,059 employees in corporate functions managing human rights risks as well as the corresponding functions in countries with elevated human rights risk
49
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT 191 social initia -
tives implemented,
sup port ing the
UN Sustainable
Development Goals
Supplier compliance
OMV has a Code of Conduct in place that ensures
suppliers support OMV’s principles and mitigates
supply chain risks such as forced labor, slavery,
corruption, and human trafficking. All suppliers are
obliged to comply with the content of the Code
of Conduct. In 2018, OMV performed a comprehen-
sive assessment in terms of the environmental,
social, and governance (ESG) performance of five
suppliers and conducted nine audits that include
sustainability elements. OMV will follow the de-
fined road map and plans to perform more than
ten audits with sustainability elements by 2020.
Human rights
Following the UN Guiding Principles on Business
and Human Rights, OMV considers human rights
to be an important aspect of our risk management
which is integrated into our decision-making pro-
cesses. In 2018, we conducted 30 human rights risk
assessments at country level to evaluate OMV’s
human rights-related activities in existing engage-
ments and assess any human rights risk in poten-
tial future engagements. A total of 243 employees
received training on human rights topics through
the e-learning tool and in-person training sessions
(2017: 423). As professional training is essential to
ensure compliance with our human rights commit-
ment, we have set ourselves the goal of training,
by 2025, all employees who are exposed to human
rights topics. By 2018, 11% of the target group was
trained. In addition, an internal awareness campaign
on human rights was implemented. No incidents
of human rights violations (child labor, harm to
indigenous people, or discrimination) were report-
ed in 2018 (2017: 0).
Community relations and development
OMV has an active partnership with the communi-
ties in all countries in which the Company operates
its business and is committed to adding value to
these societies. As part of OMV’s stakeholder dia-
log, we have implemented a community grievance
mechanism at all operating sites. In 2018, OMV
registered 1,058 grievances (2017: 1,226) from
the community grievance mechanism. All the griev-
ances were handled in accordance with OMV’s inter-
nal procedures.
OMV has set itself the goal of bringing its Commu-
nity Grievances Management (CGM) system in line
with the effectiveness criteria of the United Nations
Guiding Principles and conducted a pilot audit of
the CGM at OMV Petrom, Romania. The recommen-
dations identified as a result of the audit will be ana-
lyzed and implemented at OMV Petrom to enhance
the effectiveness of the CGM as a community en-
gagement resource. With 965 registered grievances,
the Romanian grievance procedure accounts for
91% of all OMV grievances received in 2018. OMV
implemented 191 social initiatives in 17 countries,
focusing on the needs of the local communities
and on supporting the UN Sustainable Develop-
ment Goals. In 2018, more than 2,800 members of
communities (2017: 5,100) received training for
better job opportunities or financial support to
start their own business. Over 900,000 persons
have benefitted from our community development
projects.
More information about OMV’s Environmental, Social,
and Governance (ESG) ratings and index inclusions
can be found in the OMV on the Capital Markets
chapter on page 36.
Management approaches and performance details for
all material topics will be reported in the stand-alone
OMV Sustainability Report 2018. This report serves
also as the separate consolidated non-financial report
of OMV Aktiengesellschaft in accordance with Section
267a of the Austrian Commercial Code (UGB).
50
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Health, Safety, Security, and Environment
Health, safety, security, and protection of the environment are key values at OMV. The integrity of
OMV’s operating facilities, loss prevention, proactive risk management, and acting on climate change
mitigation are essential for reaching OMV’s HSSE vision of “ZERO harm – NO losses.”
HSSE strategy
To achieve this vision, the OMV Group’s HSSE
Strategy 2020/2025 was established as an inte gral
part of the OMV Sustainability Strategy. The HSSE
Strategy focuses on the cross-functional goals of
strong HSSE commitment and leadership, increased
efficiency and effectiveness of HSSE processes,
management of HSSE risks and competent people,
as well as subject matter goals in the areas of:
Health: Improve the ability to work through
integrated health management.
Safety: Build on sustainable safety for people
and plants.
Security: Protect people and assets from
emerging malicious intentional threats.
Environment: Minimize the environmental
footprint throughout the entire lifecycle.
Health, safety, and security
In 2018, the combined Lost-Time Injury Rate (LTIR)
for OMV employees and contractors was 0.30
(2017: 0.34), and our combined Total Recordable
Injury Rate (TRIR) was 0.78 (2017: 0.79).
In Upstream, our combined efforts resulted in an
LTIR of 0.38 (2017: 0.28). We were very sad to lose
one OMV employee and two contractor employees
in 2018 in an explosion followed by a fire during a
routine workover operation at a well in Komsomols-
koye, Kazakhstan. During 2018, we continued our
efforts to improve our safety culture and focused
our attention on interactive communication on site
as well as utilizing user-friendly tools to impart
basic safety rules to our employees and supervisors.
A set of supplementary life-saving rules was rolled
out to further support our HSSE Golden Rules.
Assessments of high-risk activities, especially
activities that caused severe incidents in the past,
were continued: In 2018, the focus was on electri cal
safety, process safety, risk assessment, and the
permit to work.
In Downstream, the focus was on leadership
engagement and the quality and effectiveness of
activities such as safety walks, incident investi-
gation, and contractor HSSE audits. The LTIR was
0.25 (2017: 0.40). In 2018, special emphasis was
placed on training in different emergency and crisis
management scenarios. The successful turnaround
of the Petrobrazi refinery in 2018, with up to 5,000
additional contractor employees on site without a
single incident requiring medical treatment was a
clear highlight.
OMV Group safety performance
In mn hours worked
Company
Lost-Time Injury Rate
Total Recordable Injury Rate
Contractors
Lost-Time Injury Rate
Total Recordable Injury Rate
Total (Company and contractors)
Lost-Time Injury Rate
Total Recordable Injury Rate
2018
2017
0.29
0.88
0.31
0.74
0.30
0.78
0.24
0.73
0.39
0.82
0.34
0.79
Employees’ well-being and health are the founda-
tion for successful company performance as they
are core elements of ensuring the ability to work.
In 2018, OMV continued its long tradition of offering
healthcare and health prevention, such as cardio-
vascular disease prevention programs, cancer
awareness sessions, vaccinations, first aid courses,
and health hours, which go far beyond local legal
requirements.
During 2018, a number of key safety-related activities
took place:
The roll-out of the Group-wide Safety Culture
Program was continued with a focus on the
quality of management walk-arounds to help
people gain a better understanding of the
challenges in the field of operations and shore
up trust between the workforce and manage-
ment. In a pilot workshop in one Romanian
Asset, new forms of employee engagement
and coaching for safety were explored.
Successful
turnaround of the
Petrobrazi refinery
without a single
incident
Roll-out of the Group-
wide Safety Culture
Program was continued
51
Contractor HSSE management is key to OMV
Group’s safety performance. For this reason,
the internal regulations framework was reviewed
to simplify it and facilitate its practical applica-
tion in the future.
by 4% by 2025, both compared with 2010. This will
be achieved by improving energy efficiency across
all operations and implementing projects that
reduce direct GHG emissions and by increasing
the share of natural gas in our product portfolio.
A systematic review and update process of
internal HSSE regulations and processes was
continued and the sharing of lessons learned
from safety reports and incident investigations
is further promoted.
A volatile geopolitical environment combined with
enduring regional conflicts resulted in the 2018
security emphasis remaining on the Middle East
and North Africa. Notwithstanding the challenges
of operating securely in Yemen, Libya, and Tunisia,
the threat and reality of terrorist attacks on main-
land Europe and elsewhere further validate OMV’s
travel security policy and procedures governing all
company travellers. In addition to the enduring
terrorist threat, political extremism, criminality,
and cyber threats remain very credible threat actors.
The OMV Security Standard was revised, further
re-enforcing a flexible security strategy that enables
OMV to operate in a variety of challenging and
dynamic environments.
Progress on the resilience capability continued
throughout 2018, with improvements in the prac-
tical and procedural aspects of OMV’s Crisis
Management and Business Continuity project.
Environmental management
Due to the nature of its operations, OMV has an
impact on the environment. The Group strives to
minimize that impact at all times, particularly in
the areas of spills, energy efficiency, greenhouse
gas (GHG) emissions, and water and waste manage-
ment. OMV strives to optimize processes to use
natural resources as efficiently as possible and to
reduce emissions and discharges.
Target to reduce
carbon intensity
and further improve
energy efficiency
OMV is strongly committed to acting on climate
change mitigation and responsible resource man-
agement and has accordingly set targets to manage
and reduce the carbon footprint of its operations
and products. The principal targets are to reduce
OMV’s overall operations carbon intensity by 19%
by 2025 and to reduce the product carbon intensity
52
OMV endorsed the World Bank initiative “Zero
routine flaring by 2030.” The phasing out of existing
routine flaring and venting will make an essential
contribution to achieving OMV’s carbon targets. In
2018, for example, OMV Petrom Upstream contin-
ued to reduce its carbon intensity and put several
new gas-to-power and combined heat and power
plants into operation.
In 2018, there were two major hydrocarbon spills
(level 3 to level 5 according to OMV definitions),
with 36,874 liters of hydrocarbon spilled (2017: one
major spill totaling 120,000 liters of hydrocarbon
spilled). OMV continued to improve its oil spill
response preparedness and capabilities.
Key environmental actions in 2018:
Continued to implement the Group-wide Envi-
ronmental Management standard, introducing
the zero routine flaring and venting policy
Reported for the first time the routine flaring
amounts to the World Bank as endorser of the
World Bank initiative “Zero routine flaring by
2030”
Developed an Environmental Strategy 2025 as
part of the overall HSSE Strategy 2020/2025
focusing on carbon and water management, as
well as alignment with ISO 14001/ISO 50001
Developed and rolled out a self-assessment tool
to determine the level of compliance with the
OMV Group Standard on Environmental Manage-
ment and alignment with ISO 14001/50001
Continued the roll-out of an Environmental Risk
Assessment tool, which allows optimized data
handling, prioritization, and action tracking
Validation of three upstream greenhouse gas
emissions reduction projects in accordance with
ISO 14064-2
First-time certification of OMV Tunisia in accord-
ance with the ISO 50001 energy management
standard and renewal of the ISO 14001 certificate
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Employees
In 2018, OMV reached new heights on its growth journey. The fantastic business results we achieved
together with our 20,231 employees make us proud and confident about the future. Powered by our
people, we translate energy into quality of life. We focus on creating an environment in which people
can develop professionally and fulfill their personal aspirations in line with our business needs and
according to our Principles (the “How”).
Employer of choice
Highlights of 2018
This year we clearly articulated why OMV is an em-
ployer of choice to attract top talents both in local
markets and internationally. We asked our employ-
ees what makes them proud to work here. Their
feedback was summarized as the “5 reasons to join
OMV”:
1. Our international journey
2. Being at the forefront of technology
3. How we work together (our Principles)
4. Personal and career development
inter nationally within the OMV family
5. Being part of the diverse team
An employer branding campaign was launched in
October 2018.
OMV’s People Strategy
We know that it is the experience, skills, attitude,
and commitment of our people at OMV that turn
our strategy into reality. To unlock our organiza-
tion’s full potential we continue pursuing People
priorities supporting OMV growth:
Strengthen leadership capability
Focus on culture and performance
Increase organizational agility
Ensure OMV remains a great place to work
Consistency, transparency, and standardization in
our People processes provide a backbone for
growth. That is why we continue integrating and
bringing them together in a central Group-wide
IT platform (“My Success Factors”) as part of our
HR digitalization journey.
Five reasons
to join OMV
OMV HR achieved
the next step in the
digitalization journey
Strong leadership is needed to ensure our growth
is fast, profitable, and sustainable. We are investing
into strengthening the capabilities of our managers
through the leadership development initiatives that
were anchored in the organization in 2017:
360° feedback for heads of department to prac-
tice the culture of open feedback and learning
Cross-functional leadership sessions for middle
managers with their teams to foster shared
leadership responsibility
First Time Leaders and Leading Leader programs,
to prepare the participants for fulfilling their
leadership role
We need diverse, high-performing teams with a
strong pipeline for business critical positions to
accelerate our growth. In 2018, we rolled out a
Group-wide people review process. Approximately
1,800 managers identified successors, evaluated
these based on the PxP-Matrix (potential vs. per-
sonal impact), and provided feedback.
Within our HR digitalization agenda, our human
resources processes have been simplified and
automated further in My Success Factors – a state-
of-the-art SAP-based tool that helps us strengthen
our performance, learning, and digitally oriented
corporate culture. In addition, My Self Service –
based on SAP’s latest Fiori application – was
launched in October as a platform for employees
to manage their personal administration in the
easiest and fastest way possible.
Both platforms enable us to foster flexibility in the
workplace as diverse organizational tasks can now
be accomplished anytime and anywhere using
mobile devices. Capitalizing on this trend, we are
taking the next step to digitalize our ways of working.
Our new Group-wide Recognition program fosters
employee engagement and supports our perfor-
mance- and principle-led culture. In the program,
our employees show appreciation for extraordi-
nary results on the job and role modeling through
attractive awards. Thanks to a simple workflow, it
takes just a few clicks to nominate a colleague or a
team to give an award to.
53
To fulfill the OMV strategy of expanding into and
developing new core regions, we need a robust
pipeline of experts with strong functional exper-
tise, who are also keen to pursue an international
career at OMV.
To enable this we have been investing in learning
& development of our employees. In 2018, we in-
creased our training offering, providing new courses
(including online content) for employees to develop
their functional, business, personal, and leader -
ship skills. We have redefined career paths for all
business areas fostering expert careers and making
international career benefits clear and transparent.
Finally, our programs for early career development
and collaboration with Gubkin University in Russia
continue to deliver promising results in strengthen-
ing our talent pipeline.
As a basis for all our learning and development
activities, we still focus primarily on our learning-on-
the-job approach supported by internal knowledge
transfer, mentoring and coaching, plus formal
training. In 2018, 2,682 employees participated in
training in Austria and 14,618 in the Group overall.
Number of training participants 2018 1, 2, 3
Number of training participants 2017 1, 2, 3
In %
In %
3.0 2.8
18.3
14,618
participants
4.5 2.2
14.1
15,336
participants
75.9
79.2
Austria 4
Romania/rest of Europe
Middle East/Africa
Rest of world
2,682
11,091
435
410
Austria 4
Romania/rest of Europe
Middle East/Africa
Rest of world
2,158
12,149
691
338
Money spent on training per region 2018 1, 2, 3
Money spent on training per region 2017 1, 2, 3
In %
In %
5.5
2.0
37.4
7.07
EUR mn
6.6
4.4
29.3
4.91
EUR mn
In EUR
In EUR
55.1
59.7
Austria 4
Romania/rest of Europe
Middle East/Africa
Rest of world
2,643,692
3,895,112
144,238
385,599
Austria 4
Romania/rest of Europe
Middle East/Africa
Rest of world
1,439,500
2,928,900
213,700
324,800
1 Excluding conferences and training for external employees
2 The graphs may contain rounding differences.
3 Number of employees who received at least one training
4 Excluding GAS CONNECT AUSTRIA GmbH, Avanti GmbH and DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft.
54
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Diversity
Diversity is an enormous strength that we are
actively building on now and will continue to build
on in the future. That is why we strive to continu-
ously develop new initiatives and measures that
promote diversity and equal opportunities at OMV.
OMV is committed to its Group diversity strategy
with a focus on gender and internationality. Being
active in an industry with a strong technical focus,
it is particularly challenging to achieve a satisfac-
tory gender balance in all fields of business activity.
OMV is committed to supporting the advancement
of women to managerial positions. The strategic
objective is to achieve the best diversity mix at
senior management level. We aim to increase our
female representation in senior leadership roles
from 18% in 2017 to 25% by 2025. We support this
through a number of initiatives such as mentoring,
succession planning, and specific trainings, as
well as initiatives to increase work-life flexibility.
The proportion of women in the Group is about
26%. In OMV’s leadership development programs,
the proportion of women in 2018 was 26% (22%
in 2017). In OMV’s Upstream integrated graduate
development program for technical skill pools,
the proportion of women was 25% in 2018 (22% in
2017). The topic of diversity has been incorpo-
rated in all leadership development programs and
embedded in the OMV People Strategy.
Employee key figures
At the end of 2018, OMV employed 20,231 employ-
ees in 26 countries. Compared with 2017, the num-
ber of employees in Austria increased by 4.3% and
for the Group overall decreased by 2.4%.
OMV Group diversity
strategy focus
areas: gender and
inter nationality
Employees 1
Employees by region
Austria
Romania/rest of Europe
Middle East and Africa
Rest of world
Total number of employees
Diversity
Female
Male
Female Senior Vice Presidents
Number of nationalities 2
2018
2017
3,632
15,232
683
684
20,231
3,482
15,722
1,093
424
20,721
in %
in %
in %
26
74
17
74
25
75
18
74
1 As of year end
2 Excluding GAS CONNECT AUSTRIA GmbH, Avanti GmbH and DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft.
55
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Global oil demand
rose by 1.2%
OMV Group Business Year
In the year 2018, OMV was able to improve the clean CCS Operating Result significantly to EUR 3.6 bn.
Driven by strong results in both Upstream and Downstream business segments and the successful
implementation of the cost reduction program, this remarkable result and an operating cash flow of
EUR 4.4 bn was achieved. Free cash flow after dividends amounted to EUR 0.3 bn after major acqui-
sitions and a record dividend.
Business environment
Having lasted several years, the global economic
upturn passed its peak in mid-2018. The rate of
growth in the global economy was 3.7%, down by
0.1% compared to the previous year’s figure. Global
trade volume increased by 4.0%, 1.3 percentage
points less than in 2017. At 4.6%, the growth in eco-
nomic output in developing and emerging econo-
mies was twice that in industrialized countries
(2.3%), although in each case it was down by 0.1%.
A debt-financed tax reform enabled the USA to
deliver marked GDP growth of 2.9% underpinned
by investment and consumption, whereas GDP
growth in the eurozone was significantly lower, at
1.9%. In contrast to expansionary monetary policy,
which continued to have a stimulating effect, trade
conflicts and the threat of sanctions had an adverse
impact on the economic and investment climate.
Within the EU-28, the main influencing factor was
a reduction of 0.4 to 0.7 percentage points in eco-
nomic growth in large countries such as Germany,
France, Italy, and the UK, which make up over
80% of EU economic output. In the EU countries in
Central and Eastern Europe, the economy proved
to be in a much more stable state, expanding at
a strong rate of 4.2%, 2.3 percentage points above
the EU average.
In Germany, waning demand for exports and a sup-
ply bottleneck in the automotive industry curbed
economic growth, which slowed sharply to 1.5% in
2018. Domestically, the biggest growth drivers were
investment and consumption. Foreign trade put a
brake on growth, however, after import volumes
increased at a stronger pace than exports.
In Austria, economic growth remained very stable
in 2018, increasing by 0.1 percentage points com-
pared with 2017 to 2.7%. The strong 4.2% expansion
in industrial production and the 3.5% increase in
investment were the main factors underpinning the
positive state of the economy, to which a slight
uptick in consumption growth also contributed.
Exports rose by 4.7%, outstripping the 3.0% increase
in imports by a clear margin.
In Romania, which in 2017 expanded by 7.0%,
making it the fastest-growing country in the region,
the increase in GDP growth in 2018 was a notice-
ably weaker 4.0%. While domestic consumption
expanded by 5.3% and industrial production by 4%,
rising inflation, the current account deficit, and the
3.5% budget deficit clouded the economic picture.
Global oil demand rose by 1.2%, or 1.2 mn bbl/d,
to 99.2 mn bbl/d in 2018, with the OECD countries
(increase in demand solely in North America)
accounting for a third and the non-OECD countries
(mainly Asian countries) for two-thirds of the
increase. In the fourth quarter of 2018, global
demand surpassed 100 mn bbl/d for the first time.
Global oil production rose by 2.5 mn bbl/d to
99.9 mn bbl/d in 2018, more than twice as fast as
demand, as a result of which stocks increased
by 0.7 mn bbl/d. Almost 90% of the rise in global
production was attributable to increased production
in the USA, which lifted its oil output by 16% to
15.4 mn bbl/d.
Crude oil production in the OPEC countries
remained almost unchanged year on year at
32.5 mn bbl/d – a decrease of 0.3%. Declines in
pro duction in Venezuela (-30%) and Iran (-6%)
were offset by other OPEC members.
The agreement among the 24-member OPEC alli-
ance to extend the cap on production, the with-
drawal of the USA from the international nuclear
deal with Iran, and the threat of sanctions com-
bined to push up the price of Brent crude from
USD 66.5/bbl to over USD 80/bbl by mid-May 2018.
After stabilizing temporarily in early summer, the
oil price rose by 25% between mid-August and
early October to an annual high of USD 86.2/bbl,
making the decline in price – by USD 36/bbl to an
annual low of USD 50.2/bbl by year-end – all the
more dramatic. This slump in price was due mainly
to US production being much higher than origi-
nally forecast, the receding threat of US sanctions
on importers of Iranian crude, and increasing con-
cern about weak demand in the economy.
56
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Brent crude was traded at an average of
USD 71.31/bbl in 2018 and was therefore 32% more
expensive than in the previous year. The EUR/USD
exchange rate fluctuated between 1.25 and 1.13 in
2018. Although the US currency stabilized some-
what in the course of the year, the annual average
of 1.18 represents a fall in value of 4.5%. On the
Rotterdam market for mineral oil products, euro
prices for the main products rose by between 15%
for gasoline and 24% for middle distillates and
heavy fuel oil.
The natural gas market in Austria delivered a weaker
performance than in the previous year. Demand fell
by 4% year on year to around 8.6 bcm, or 96.7 TWh.
The market for space heating saw a decline of 5%
due to weather conditions, gas-fired power plants
generated 9% less electricity, and only industrial
consumption increased in response to economic
conditions. Domestic natural gas production
dropped by 18% to 11.1 TWh, meaning that market
coverage was also down to 11%. 85.6 TWh of
demand were mainly met through net imports and
by a slight withdrawal from storage. The volume
in storage at year-end was 58.4 TWh, meaning that
the filling level remained almost unchanged against
the previous year at 63.7%.
Sales of mineral oil products in ten Central and
Eastern European countries – OMV’s relevant mar-
ket – fell by approximately 1% in 2018 to around
144 mn t. In Austria, market volumes stagnated at
11.3 mn t, with demand for fuel about 1% higher,
but demand for heating oil almost 15% lower. In
Germany, total sales fell by 1.9 mn t, or 2%, to
95 mn t. With the exception of aviation fuel sales,
which barely changed, all main products experi-
enced weaker demand. In Romania, sales rose by
around 1% to just under 9 mn t.
Crude price (Brent) – monthly average
In USD/bbl
90
85
80
75
70
65
60
55
50
45
40
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sept.
Oct.
Nov.
Dec.
Brent price 2018
Brent price 2017
Financial review of the year
Consolidated sales increased by 13% to
EUR 22,930 mn. Higher oil, gas and product prices
as well as higher sales volumes were partially
offset by the missing contribution from OMV Petrol
Ofisi following its divestment in 2017. The clean
CCS Operating Result was substantially up by 23%
from EUR 2,958 mn to EUR 3,646 mn, mainly due
to a considerably higher Upstream result of
EUR 2,027 mn (2017: EUR 1,225 mn). The Down-
stream clean CCS Operating Result decreased to
EUR 1,643 mn (2017: EUR 1,770 mn). The clean
Group tax rate in 2018 was 39% (2017: 25%), due
to a considerably stronger Upstream contribution,
particularly from high tax rate fiscal regimes such
as Norway and Libya. The clean CCS net income
amounted to EUR 2,108 mn (2017: EUR 2,035 mn).
Clean CCS net income attributable to stockholders
slightly decreased to EUR 1,594 mn (2017:
EUR 1,624 mn). Clean CCS Earnings Per Share
marginally declined to EUR 4.88 (2017: EUR 4.97).
Net special items of EUR (149) mn were recorded
in 2018 (2017: EUR (1,281) mn). In Upstream, the
net special items amounted to EUR 95 mn in 2018
compared to EUR (7) mn in 2017. Special items in
2018 were mainly related to reversals of past impair-
ments of EUR 105 mn in Romania and Norway, to
temporary hedging effects of EUR 89 mn and to
gains from divestments in Pakistan (EUR 52 mn)
and Tunisia (EUR 39 mn). These effects were com-
pensated by negative impacts from the financial
assets related to the contingent consideration from
the divestments of Rosebank and of OMV (U.K.)
Limited amounting to EUR (78) mn, mainly as a
57
Record clean
CCS Operating Result
of EUR 3,646 mn
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT result of the shift of the expected final investment
decision. Additionally, a special item was recorded
to the amount of EUR (38) mn for the divestment of
OMV’s share in the Polarled pipeline and Nyhamna
gas processing facilities in the North Sea region.
In Corporate and Other, net special items amounted
to EUR (26) mn in 2018 (2017: EUR (32) mn). Positive
CCS effects of EUR 27 mn (2017: EUR 55 mn) were
recognized in 2018.
Downstream net special items amounted to
EUR (219) mn (2017: EUR (1,242) mn) and were
mainly related to the divestment of the Samsun
power plant in Turkey (EUR (150) mn) and to
the impairment of the Borealis fertilizer business
of EUR (33) mn. The net special items in 2017
were mainly related to the divestment of OMV
Petrol Ofisi.
OMV Group’s reported Operating Result more
than doubled in 2018 to EUR 3,524 mn (2017:
EUR 1,732 mn). The net financial result improved
to EUR (226) mn (2017: EUR (246) mn). With a
Group tax rate of 40% (2017: 43%) the net income
amounted to EUR 1,993 mn (2017: EUR 853 mn).
Net income attributable to stockholders was
EUR 1,438 mn compared to EUR 435 mn in 2017.
Earnings Per Share more than tripled to
EUR 4.40 compared to EUR 1.33 in 2017.
Key financials
Sales 1
Clean CCS Operating Result 2
Clean Operating Result Upstream
Clean CCS Operating Result Downstream
Clean Operating Result Corporate and Other
Consolidation: elimination of inter-segmental profits
Clean Group tax rate
Clean CCS net income 2
Clean CCS net income attributable to stockholders 2, 3
Clean CCS EPS 2
Special items
thereof Upstream
thereof Downstream
thereof Corporate and Other
CCS effects: inventory holding gains/(losses)
Operating Result Group
Operating Result Upstream
Operating Result Downstream
Operating Result Corporate and Other
Consolidation: elimination of inter-segmental profits
Net financial result
Group tax rate
Net income
Net income attributable to stockholders
Earnings Per Share (EPS)
Cash flow from operating activities
Free cash flow before dividends
Free cash flow after dividends
Positive free cash
flow after dividends of
EUR 263 mn despite
a record dividend and
major acquisitions
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in %
in EUR mn
in EUR mn
in EUR
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in %
in EUR mn
in EUR mn
in EUR
in EUR mn
in EUR mn
in EUR mn
2018
2017
22,930
3,646
2,027
1,643
(21)
(3)
39
2,108
1,594
4.88
(149)
95
(219)
(26)
27
3,524
2,122
1,420
(47)
28
(226)
40
1,993
1,438
4.40
4,396
1,043
263
20,222
2,958
1,225
1,770
(16)
(21)
25
2,035
1,624
4.97
(1,281)
(7)
(1,242)
(32)
55
1,732
1,218
584
(48)
(21)
(246)
43
853
435
1.33
3,448
1,681
1,013
∆
13%
23%
66%
(7)%
31%
(87)%
n.m.
4%
(2)%
(2)%
(88)%
n.m.
n.m.
n.m.
n.m.
103%
74%
143%
(3)%
(234)%
(8)%
n.m.
134%
231%
n.m.
28%
(38)%
(74)%
1 Sales excluding petroleum excise tax
2 Adjusted for special items; clean CCS figures exclude fuels’ inventory holding gains/losses (CCS effects) resulting from the fuels refineries
and OMV Petrol Ofisi
3 After deducting net income attributable to hybrid capital owners and net income attributable to non-controlling interests
58
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Special items and CCS effect
In EUR mn
Clean CCS Operating Result
Special items
thereof: Personnel restructuring
thereof: Unscheduled depreciation
thereof: Asset disposal
thereof: Other
CCS effect
Operating Result
More details on special items and CCS effects
can be found in Note 4 of the consolidated financial
statements.
Notes to the income statement
Sales Revenues
In EUR mn
Sales to third parties
Upstream
Downstream
thereof Downstream Oil
thereof Downstream Gas
Corporate and Other
Total
Intersegmental sales
Upstream
Downstream
thereof Downstream Oil
thereof Downstream Gas
thereof intrasegmental elimination Downstream
Corporate and Other
Total
Total Sales (not consolidated)
Upstream
Downstream
thereof Downstream Oil
thereof Downstream Gas
thereof intrasegmental elimination Downstream
Corporate and Other
Total
2018
3,646
(149)
(40)
51
3
(164)
27
3,524
2017
2,958
(1,281)
(31)
16
(31)
(1,235)
55
1,732
∆
23%
(88)%
n.m.
n.m.
n.m.
n.m.
n.m.
103%
2018
2017
∆
2,170
20,756
14,707
6,049
4
22,930
1,329
18,887
14,065
4,822
6
20,222
3,386
74
48
166
(139)
335
3,795
2,839
79
34
161
(116)
349
3,267
5,556
20,830
14,755
6,215
(139)
339
26,725
4,168
18,967
14,099
4,983
(116)
355
23,490
63%
10%
5%
25%
(28)%
13%
19%
(7)%
39%
3%
(21)%
(4)%
16%
33%
10%
5%
25%
(21)%
(4)%
14%
% of
Group
total
9%
91%
64%
26%
0%
100%
89%
2%
1%
4%
(4)%
9%
100%
21%
78%
55%
23%
(1)%
1%
100%
59
Sales revenues
increased by 13%
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Sales of the Upstream Business Segment increased
by 33%, impacted by the gas business in Russia
which was acquired in December 2017. Additionally,
an improved market environment and higher lifted
quantities in Norway and Libya contributed to
higher sales revenues. Increase in the Downstream
Business Segment was mainly driven by a higher
pricing environment, with Downstream Oil sales
amounting to 55% of the total not consolidated
sales. The positive effects were partially offset by
the divestment of OMV Petrol Ofisi in June 2017.
After the elimination of the intersegmental sales,
total sales revenues to third parties increased by
13% to EUR 22,930 mn. Sales to third parties split
by geographical areas can be found in the Notes
to the Consolidated Financial Statements (Note 4
– Segment Reporting).
Other operating income increased to EUR 517 mn
in 2018 (2017: EUR 488 mn). 2018 was impacted
by reversals of past impairments in amount of
EUR 105 mn in Romania and Norway due to sig-
nificantly improved operational performance.
Moreover, other operating income contained a
gain of EUR 52 mn related to the disposal of the
Upstream companies active in Pakistan and a
gain on disposal of the subsidiary OMV Tunisia
Upstream GmbH amounting to EUR 39 mn. 2017
was impacted by a gain of EUR 137 mn upon the
disposal of OMV (U.K.) Limited.
Income from equity-accounted investments
amounted to EUR 391 mn (2017: EUR 510 mn) and
mainly reflected the 36% share of the result from
the Borealis group amounting to EUR 327 mn
(2017: EUR 394 mn). The decrease compared to
2017 was mainly due to a positive impact in the
2017 net result of Pearl Petroleum Company
Lim ited, following the reach of a settlement over
a dispute concerning certain matters under the
Heads of Agreement at the Khor Mor and Chem-
chemal fields amounting to EUR 90 mn.
Purchases (net of inventory variation), which
include the cost of goods and materials that are
used for conversion into finished or interme -
di ary products as well as goods purchased for
reselling, inventory changes and write-offs, totaled
EUR (14,094) mn (2017: EUR (12,331) mn). Other
operating expenses totaled EUR (485) mn in 2018
(2017: EUR (1,491) mn). 2017 included a loss of
EUR (1,209) mn linked to the divestment of OMV
Petrol Ofisi disposal group, while in 2018 a loss on
the divestment of OMV Samsun Üretim Sanayi ve
Ticaret A.S¸. of EUR (150) mn was included. Further
details on changes in group structure can be
found in Note 3 of the Notes to the Consolidated
Financial Statements. Research and development
(R&D) expenses, which are included in Other oper-
ating expenses, amounted to EUR (40) mn (2017:
EUR (33) mn).
The net financial result improved to EUR (226) mn
(2017: EUR (246) mn), mainly as a result of higher
interest income, partly compensated by higher bank
fees. Dividend income amounted to EUR 20 mn
(2017: EUR 15 mn).
In EUR mn
In EUR mn
In EUR mn
in %
2018
(1,007)
(298)
(1,305)
40
2017
(492)
(142)
(634)
43
Income tax
Current taxes
Deferred taxes
Taxes on income and profit
Effective tax rate
The Group’s effective tax rate decreased slightly to
40% (2017: 43%). For further details on taxes on
income, please refer to Note 12 of the consolidated
financial statements.
60
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Operating Result
significantly increased
to EUR 3,524 mn
Cashflow from
operating activities
up by EUR 948 mn
compared to last year
Summarized income statement
In EUR mn
Sales revenues
Other operating income
Net income from equity-accounted investments
Purchases (net of inventory variation)
Production and operating expenses
Production and similar taxes
Depreciation, amortization and impairment charges
Selling, distribution and administrative expenses
Exploration expenses
Other operating expenses
Operating Result
Net financial result
Taxes on income
Net income for the year
thereof attributable to hybrid capital owners
thereof attributable to non-controlling interests
Net income attributable to stockholders of the parent
Cash flow performance
Cash flow from operating activities amounted
to EUR 4,396 mn, up by EUR 948 mn compared to
2017, supported by positive net working capital
effects and an improved market environment as
well as higher dividends from Borealis.
Cash flow from investing activities showed an
outflow of EUR (3,353) mn in 2018 compared to
EUR (1,766) mn in 2017, containing the acquisition
of a 20% stake in an offshore concession in Abu
Dhabi that led to an outflow of USD (1.5) bn and
the acquisition of Shell’s Upstream business in New
Zealand that led to an outflow of EUR (350) mn.
Cash flow from investing activities in 2018 also
included a cash outflow of EUR (275) mn related to
the financing agreements for the Nord Stream 2
pipeline project. In 2017, the divestments of OMV
(U.K.) Limited and OMV Petrol Ofisi led to an
inflow of EUR 1,689 mn, which was offset by the
acquisition of an interest in the Yuzhno Russkoye
gas field that led to an outflow of EUR (1,644) mn.
Cash flow from financing activities showed an
outflow of EUR (975) mn (2017: inflow of
EUR 27 mn). In 2018, OMV issued two Eurobonds
totaling EUR 1,000 mn as well as a hybrid bond
of EUR 500 mn, which partly offset the repay -
ment of a EUR 750 mn Eurobond, a EUR 750 mn
hybrid bond and other long-term debt as well as
dividend distributions.
2018
2017
22,930
517
391
(14,094)
(1,594)
(392)
(1,827)
(1,749)
(175)
(485)
3,524
(226)
(1,305)
1,993
78
477
1,438
20,222
488
510
(12,331)
(1,645)
(311)
(1,852)
(1,636)
(221)
(1,491)
1,732
(246)
(634)
853
103
315
435
∆
13%
6%
(23)%
14%
(3)%
26%
(1)%
7%
(21)%
(67)%
103%
(8)%
106%
134%
(24)%
51%
n.m.
Despite major acquisitions in Abu Dhabi and
New Zealand, free cash flow after dividends in
2018 showed an inflow of EUR 263 mn (2017:
EUR 1,013 mn).
Capital Expenditure (CAPEX)
CAPEX in 2018 amounted to EUR 3,676 mn (2017:
EUR 3,376 mn), mainly driven by the acquisitions
of a 20% stake in the offshore concession in Abu
Dhabi from ADNOC as well as Shell´s Upstream
business in New Zealand. Upstream CAPEX
increased to EUR 3,075 mn (2017: EUR 2,781 mn).
Apart from the acquisitions in New Zealand and
Abu Dhabi, the Upstream Business Segment
invested mainly in field redevelopments, drilling
and work-over activities in Romania as well as
in field developments in Norway and Austria. Down-
stream CAPEX slightly decreased to EUR 576 mn
(2017: EUR 580 mn), of which EUR 506 mn are attrib-
utable to Downstream Oil (2017: EUR 491 mn) and
EUR 70 mn to Downstream Gas (2017: EUR 90 mn),
mainly related to the maintenance of refineries
and pipelines. CAPEX in the Corporate and Other
segment was EUR 25 mn (2017: EUR 15 mn).
61
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Capital expenditure 1
In EUR mn
Upstream
Downstream
thereof Downstream Oil
thereof Downstream Gas
Corporate and Other
Total capital expenditure
+/– Changes in the consolidated Group and other adjustments 2
– Investments in financial assets and acquisition of non-controlling interest
Additions according to statement of non-current assets
(intangible and tangible assets)
+/– Non-cash changes
Cash outflow due to investments in intangible assets and property,
plant and equipment
+ Cash outflow due to investments, loans and other financial assets
+ Acquisitions of subsidiaries and businesses net of cash acquired
Investments as shown in the cash flow statement
2018
3,075
576
506
70
25
3,676
(86)
(4)
3,585
(393)
3,193
305
357
3,855
2017
2,781
580
491
90
15
3,376
(1,595)
(20)
1,762
(176)
1,586
366
1,644
3,596
∆
11%
(1)%
3%
(22)%
69%
9%
(95)%
(78)%
104%
123%
101%
(17)%
(78)%
7%
1 Includes acquisitions as well as equity-accounted investments and other interests; adjusted for capitalized decommissioning costs, exploration wells
that have not found proved reserves, borrowing costs and other additions that by definition are not considered capital expenditure
2 2017 included EUR 1,7 bn related to the acquisition of a 24,99% interest in the Yuzhno Russkoye field
The reconciliation of total capital expenditures to
additions according to the statement of non-current
assets (intangible and tangible) mainly relates to
additions which by definition are not considered to
be capital expenditures, as well as investments in
financial assets and changes in the consolidated
Group.
The difference between the additions shown in
the statement of non-current assets and the invest-
ments reported in the cash flow statement partly
arise from additions to intangible and tangible
assets that did not affect investing cash flows
during the period (including accrued liabilities
arising from investments, new finance leases,
decommissioning and capitalized borrowing costs).
In addition, cash outflows due to investments in
financial assets as well as the acquisition of sub-
sidiaries and businesses are included in the overall
investments shown in the cash flow statement.
Statement of financial position
Major acquisitions
in Abu Dhabi
and New Zealand
Total assets increased by EUR 5,385 mn to
EUR 36,961 mn. The non-current assets were
mainly impacted by the acquisition of a 20% stake
in two offshore oil fields in Abu Dhabi and the
acquisition of Shell’s Upstream business in New
Zealand, for which more details are provided in
Note 3 of the Consolidated Financial Statements.
Equity-accounted investments increased by
EUR 98 mn and included to a large extent the con-
tribution of Borealis as well as the proportional
results from other equity- accounted investments,
currency translation of foreign operations and other
changes including dividends received amounting
to EUR 422 mn. Drawdowns under the financing
agreements for the Nord Stream 2 pipeline project
and an increased derivatives position were the
main drivers for the increase in other non-current
assets. Current assets increased by EUR 2,619 mn
and amounted to EUR 12,017 mn as of December 31,
2018. Assets held for sale decreased by EUR 158 mn
mainly due to the divestment of the Upstream
companies active in Pakistan.
Equity (including non-controlling interest) rose by
7% in comparison to 2017. Equity ratio decreased to
42% (2017: 45%). Pensions and similar obligations
increased by EUR 92 mn. Non-current decommis-
sioning and restoration obligations increased by
EUR 603 mn, mainly due to new obligations out
of the acquisition of a 20% stake in two offshore
oil fields in Abu Dhabi and the acquisition of Shell’s
Upstream business in New Zealand.
62
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Summarized statement of financial position
In EUR mn
Assets
Non-current assets
Intangible assets and property, plant and equipment
Equity-accounted investments
Other non-current assets
Deferred tax assets
Current assets
Inventories
Trade receivables
Other current assets
Assets held for sale
Equity and liabilities
Equity
Non-current liabilities
Pensions and similar obligations
Bonds and other interest-bearing debts
Decommissioning and restoration obligations
Other provisions and liabilities
Deferred tax liabilities
Current liabilities
Trade payables
Bonds and other interest-bearing debts
Provisions and other liabilities
Liabilities associated with assets held for sale
Total assets/equity and liabilities
2018
2017
∆
24,896
18,432
3,011
2,695
759
12,017
1,571
3,420
7,026
47
15,342
11,917
1,096
4,909
3,673
1,508
731
9,680
4,401
843
4,436
22
36,961
21,972
16,301
2,913
2,014
744
9,398
1,503
2,503
5,392
206
14,334
10,352
1,003
4,792
3,070
1,050
437
6,826
3,262
902
2,662
63
31,576
13%
13%
3%
34%
2%
28%
5%
37%
30%
(77)%
7%
15%
9%
2%
20%
44%
67%
42%
35%
(7)%
67%
(65)%
17%
Current and non-current bonds and other inter -
est bearing debts increased by EUR 58 mn to
EUR 5,752 mn compared to 2017, primarily related
to the issuance of two Eurobonds totaling
EUR 1,000 mn in December 2018, partly compen-
sated by the repayment of an Eurobond amount -
ing to EUR 750 mn and other repayments of long-
term debt.
Current- and non-current other liabilities increased
mainly due to a higher derivatives position.
Deferred tax liabilities increased to EUR 731 mn
(2017: EUR 437 mn) mainly due to the acquisition
of Shell’s Upstream business in New Zealand, for
which more details are provided in Note 3 of the
Consolidated Financial Statements. Liabilities asso-
ciated with assets held for sale decreased to
EUR 22 mn mainly due to the divestments of the
Upstream companies active in Pakistan.
Gearing ratio
Gearing ratio
Bonds
Other interest-bearing debts
Liabilities on finance leases
Debt
Cash and cash equivalents 1
Net debt
Equity
Gearing ratio
1 Including cash reclassified to “held for sale”.
2 With the implementation of IFRS 16 on January 1, 2019, the Gearing ratio will be 18%
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in %
2018
5,007
745
288
6,040
4,026
2,014
15,342
132
2017
4,757
937
292
5,986
3,981
2,005
14,334
14
∆
5%
(20)%
(1)%
1%
1%
0%
7%
n.m.
63
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Upstream
In the Upstream Business Segment, OMV continued to reshape its portfolio in line with the focus on
an improved quality of the asset base and reserves growth in 2018. The acquisition of Shell’s upstream
assets in New Zealand and the signing of new offshore concessions in Abu Dhabi were part of these
efforts. Production cost decreased to USD 7.0/boe, while the one-year Reserves Replacement Rate reached
180% at year end.
At a glance
Clean Operating Result
Special items
Operating Result
Capital expenditure1
Exploration expenditure
Exploration expenses
Production cost 2
Production cost
decreased
to USD 7/boe
Total hydrocarbon production 2
Total hydrocarbon production 2
Total hydrocarbon sales volumes
Proved reserves as of December 31
Average Brent price
Average realized crude price
Average realized gas price 2
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in USD/boe
in kboe/d
in mn boe
in mn boe
in mn boe
in USD/bbl
in USD/bbl
in USD/1,000 cf
2018
2,027
95
2,122
3,075
300
175
7.01
427
156
148.7
1,270
71.31
62.13
4.72
2017
1,225
(7)
1,218
2,781
230
222
8.79
348
127
118.3
1,146
54.19
49.95
5.10
∆
66%
n.m.
74%
11%
31%
(21)%
(20)%
23%
23%
26%
11%
32%
24%
(8)%
Strong increase
of clean Operating
Result by 66%
to EUR 2,027 mn
Notes: The net result from the equity-accounted investment in Pearl is reflected in the Operating Result in all presented periods. Following the closing
of the acquisition of a 24.99% interest in the Yuzhno Russkoye gas field on December 1, 2017, OMV’s share of 24.99% in Severneftegazprom (“SNGP,”
operator of Yuzhno Russkoye) has been accounted for at-equity and the result of the JSC Gazprom YRGM Development (“Trader”), in which OMV has a
stake of 99.99%, has been fully consolidated.
1 Capital expenditure including acquisitions, notably the acquisition of a 20% stake in two offshore oil fields in Abu Dhabi from ADNOC in the amount
of USD 1.5 bn in Q2/18
2 Including OMV’s interest in the Yuzhno Russkoye gas field, starting from December 1, 2017
Financial performance
The clean Operating Result substantially increased
from EUR 1,225 mn in 2017 to EUR 2,027 mn in 2018
due to a significantly better operational perfor mance
in the amount of EUR 582 mn. This was largely
attributable to higher sales volumes following the
acquisition of the interest in the Yuzhno Russkoye
gas field in Q4/17 as well as the increased volumes
from Libya. In addition, the contribution from the
United Arab Emirates, as a result of the acquisition
of a 20% stake in two offshore oil fields in Abu
Dhabi in Q2/18, impacted this result positively. These
effects were partially offset by lower production
contributions from Romania and New Zealand as
well as the missing contribution from Pakistan
following the divestment of OMV’s Upstream com-
panies in Q2/18. Net market effects had a positive
impact of EUR 276 mn. Higher average prices were
partially offset by hedging losses and the negative
FX impact due to the depreciation of the US dollar
against the euro. The 2017 result included a positive
one-time effect of EUR 90 mn. OMV Petrom con-
tributed EUR 693 mn in 2018 to the clean Operating
Result compared to EUR 363 mn in 2017.
Net special items in 2018 amounted to EUR 95 mn
(2017: EUR (7) mn) and were mainly associated
with temporary hedging effects of EUR 89 mn.
The Operating Result improved substantially to
EUR 2,122 mn (2017: EUR 1,218 mn).
At USD 7.0/boe, production cost excluding royalties
were down by 20% as a result of higher production
coupled with the ongoing cost reduction program,
partly offset by negative FX impacts due to the
US dollar devaluation. At OMV Petrom, production
cost increased by 3% to USD 11.2/boe mainly due
to lower volumes.
64
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
Production increased
by 23% to 427 kboe/d
Total hydrocarbon production rose by 23% to
427 kboe/d primarily due to Russia’s contribution
of 100 kboe/d. This was partially offset by lower
production from Romania and Norway, due to nat-
ural decline, New Zealand, due to repair works at
the Pohokura pipeline, and Pakistan, following the
divestment of OMV’s Upstream companies in Q2/18.
OMV Petrom’s total daily production went down
by 8 kboe/d to 160 kboe/d mainly due to natural
decline. Total sales volumes improved by 26%,
mainly attributable to the contribution from Russia
and higher sales in Libya, and partially offset by
lower sales in Romania, New Zealand, and Austria
as well as Pakistan.
In 2018, the average Brent price reached USD 71/bbl,
an increase of 32%, mainly driven by robust demand
growth, declining production in Venezuela, and
fears of global market tightness ahead of effective-
ness of US Iran sanctions despite a change in
market sentiment from undersupply to oversupply
toward year end. The Group’s average realized
crude price rose by 24%. The average realized gas
price in USD/1,000 cf went down by 8% as 2018
reflects the contribution from Russia. Realized prices
in 2018 were impacted by a realized hedging loss
of EUR (308) mn.
Capital expenditure including capitalized E&A rose
in 2018 to EUR 3,075 mn (2017: EUR 2,781 mn) and
also accounts for the acquisition of a 20% stake in
two offshore oil fields in Abu Dhabi from ADNOC in
the amount of USD 1.5 bn and Shell’s Upstream busi-
ness in New Zealand in the amount of USD 579 mn.
In 2017, capital expenditure including capitalized
E&A was mainly related to the acquisition of the
interest in the Yuzhno Russkoye gas field in Q4/17.
Organic capital expenditure was undertaken pri-
marily in Romania, Norway, and the United Arab
Emirates. Exploration expenditure increased by
31% to EUR 300 mn and was mainly related to activ-
ities in Romania, Norway, and Austria.
Production
Romania 2
Austria
Kazakhstan 2
United Kingdom
Norway
Libya
Tunisia
Pakistan 3
Yemen
Kurdistan Region
of Iraq
United Arab
Emirates
New Zealand
Russia
Total
2018
2017
Oil and NGL
in mn bbl
Natural gas 1
in mn boe
in bcf
Total
in mn boe
Oil and NGL
in mn bbl
Natural gas 1
in mn boe
in bcf
Total
in mn boe
24.6
4.3
2.2
–
17.1
10.9
1.3
0.1
1.1
168.7
30.9
1.7
–
60.9
–
2.9
7.0
–
31.2
5.2
0.3
–
10.1
–
0.5
1.2
–
0.9
11.6
1.9
1.8
2.1
–
66.5
–
16.0
218.4
518.2
–
2.7
36.4
89.5
55.8
9.4
2.5
–
27.3
10.9
1.8
1.3
1.1
2.8
1.8
4.8
36.4
156.0
25.0
4.6
2.3
0.0
18.7
9.1
1.9
0.2
–
181.6
34.2
1.3
0.0
61.6
–
2.9
15.3
–
33.6
5.7
0.2
0.0
10.3
–
0.5
2.6
–
0.9
11.2
1.9
–
2.9
–
65.6
–
20.0
19.8
347.9
–
3.3
3.3
61.3
58.6
10.3
2.6
0.0
29.0
9.1
2.4
2.7
–
2.7
–
6.2
3.3
127.0
1 To convert gas from cf to boe, the following conversion factor was applied in all countries: 1 boe = 6,000 cf; except for Romania, where the
following was used: 1 boe = 5,400 cf.
2 As OMV holds 51% of OMV Petrom, it is fully consolidated, and figures include 100% of OMV Petrom’s production volumes.
3 The upstream business in Pakistan was divested on June 28, 2018.
65
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Acquisition of a 20%
stake in Abu Dhabi
offshore concessions
Portfolio developments
In 2018, OMV continued to optimize its upstream
portfolio in line with the focus on improved quality
of the asset base and growth of reserves. This
was mainly supported by the acquisition of Shell’s
upstream assets in New Zealand and of a 20%
stake in Abu Dhabi offshore concessions as well as
the divestment of the Pakistan upstream business,
part of the upstream assets in Tunisia, marginal
fields in Romania, and the Polarled pipeline in Nor-
way. In addition, strategic partnerships with sig-
nificant players in high-growth regions were estab-
lished and enhanced in 2018. OMV signed the Basic
Sales Agreement for a share of 24.98% in Achimov
4A/5A with Gazprom, and a strategic partnership was
set up with Sapura.
Central and Eastern Europe
Portfolio optimization continued with an agree-
ment to transfer nine fields to Mazarine Energy
signed on September 28, 2018. The transaction has
been effective from March 1, 2019. The divestment
of these nine fields located in the Moinesti Zemes
region (Romania), with cumulative oil and gas
production of approximately 1,000 boe/day, is part
of the portfolio optimization program for OMV
Petrom Upstream.
In 2018, drilling activities were sustained at a high
level with an average of 13 drilling rigs active in
OMV Petrom’s operated licenses. A total of 110 new
wells and sidetracks were drilled by the end of 2018,
representing a significant increase compared with
previous years. These activities included drilling
two development wells that will make a signi ficant
contribution to OMV Petrom production, as well
as complex and deep (> 4,000 m) exploration wells
(6600 Baicoi and 4461 Totea South).
Russia
After setting up the new core region of Russia in
2017 and closing the acquisition of a 24.99% share
in the Yuzhno Russkoye gas field, in 2018 OMV went
on to sign a “Basic Sale Agreement” which foresees
a potential acquisition of a 24.98% interest in the
Achimov 4A/5A phase development in the Urengoy
gas and condensate field. The “Basic Sale Agree-
ment” replaces the “Basic Agreement” concluded
between OMV and Gazprom on December 14, 2016,
which provided for a potential asset swap in return
for an investment by Gazprom in OMV (Norge) AS.
The execution and implementation of the potential
transaction are subject to agreement with Gazprom
on the final transaction documents plus regulatory
and corporate approvals at a later stage.
Additionally, OMV continued to strengthen its part-
nership with Gazprom by signing a Memorandum
on Strategic Cooperation. The document envisages
the creation of a Joint Coordinating Committee
on collaboration in the natural gas sector, both up-
stream and downstream, in the area of science and
technology, as well as staff training.
North Sea
In 2018, as part of its portfolio optimization efforts,
OMV sold its 9.1% stake in the Polarled pipeline
as well as its 3.8% stake in the Nyhamna gas pro-
cessing facilities to CapeOmega. The transaction
has been effective from January 1, 2018.
Middle East and Africa
In December 2018, OMV and ADNOC signed a con-
cession agreement awarding OMV with a 5% inter-
est in the Ghasha concession for the duration of
40 years effective November 2018. The concession
is located offshore Abu Dhabi and consists of
three major gas and condensate development proj-
ects – Hail, Ghasha and Dalma – as well as other
offshore oil, gas, and condensate fields including
Nasr, SARB, and Mubarraz. According to ADNOC’s
planning, the project will start producing around
the middle of the next decade. The fields are expect-
ed to produce at plateau at least 1.5 bn cf per day
(40 mn cm), as well as over 120 kboe/d of oil and
high-value condensate (gross).
In April 2018, OMV and ADNOC signed a new off-
shore concession agreement for a 20% stake in the
offshore concession Abu Dhabi – Satah Al Razboot
(SARB) field with the satellite fields Bin Nasher and
Al Bateel, and the Umm Lulu field, as well as the
associated infrastructure. The agreed participation
fee is USD 1.5 bn and the contract term is 40 years.
The concession was retroactively effective from
March 9, 2018.
66
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Portfolio optimization continued in 2018 with final-
ization of the divestments of the upstream busi-
ness in Pakistan in June 2018 as well as of part of
the upstream business in Tunisia.
On June 28, 2018, OMV closed the sale of its up-
stream companies active in Pakistan to Dragon
Prime Hong Kong Limited, a wholly owned subsid-
iary of United Energy Group Limited, an indepen-
dent exploration and production company. The final
purchase price was approximately EUR 158 mn.
On December 21, 2018, OMV closed the sale of its
wholly owned subsidiary OMV Tunisia Upstream
GmbH to a subsidiary of Panoro Energy ASA. OMV
Tunisia Upstream GmbH holds a 49% interest in
the Cercina/Cercina Sud, El Ain/Gremda, El Hajeb/
Guebiba, and Rhemoura concessions in Tunisia
and 50% of the shares in the Thyna Petroleum Ser-
vices S.A. (TPS) operating company. The agreed
purchase price was USD 65 mn. The effective date
of the transaction is January 1, 2018. Average pro-
duction of the divested assets in 2018 was around
1.6 kboe/d, net to OMV.
Asia-Pacific
In 2018, OMV took a significant step in growing
Asia-Pacific into a core region by acquiring Shell’s
upstream assets in New Zealand. The acquisition
was completed on December 28, 2018, and included
48% of the Pohokura gas condensate field, the
largest producing field in New Zealand, as well as
83.75% of the Maui gas condensate field and related
infrastructure for production, storage, and trans-
portation. OMV was already a partner in the two
assets (OMV’s former stakes: 26% in Pohokura and
10% in Maui) and took over operatorship upon
closing. The economic effective date of the trans-
action is January 1, 2018. Average production of
the acquired assets in the first two months of 2018
was around 31 kboe/d. The purchase price was
USD 579 mn. Besides that, OMV acquired Todd
Energy’s 6.25% of the Maui gas condensate field
and therefore holds 100% per year end.
In parallel, OMV also acquired Shell’s 60.98% interest
in the Great South Basin (GSB) exploration block.
The transfer of GSB was effective on March 15,
2018, and increased OMV’s stake to 82.93%.
In line with OMV’s strategy to form partnerships
with major players in high-growth regions, OMV
and Sapura Energy Berhad (“Sapura Energy”) have
closed the agreement to form a strategic partner-
ship on January 31, 2019. Under the agreement,
OMV Exploration & Production GmbH (OMV E&P),
a wholly owned subsidiary of OMV Aktiengesell-
schaft, has bought a 50% stake of the issued share
capital in a new joint venture com pany established
in 2019, called SapuraOMV Upstream Sdn. Bhd.
OMV paid USD 540 mn for its 50% interest in
SapuraOMV Upstream Sdn. Bhd. In addition, the
parties agreed to an additional consideration of up
to USD 85 mn based on certain conditions, mainly
linked to the resource volume in Block 30, Mexico,
at the time the final investment decision is taken.
Both parties have also agreed to refinance the
existing inter-company debt of USD 350 mn. The
management of the partnership will be based in
Malaysia and an equal number of representatives
from both sides will sit on the board of directors.
The new entity, SapuraOMV Upstream Sdn. Bhd.
will be fully consolidated in OMV’s financial state-
ments. SapuraOMV Upstream Sdn. Bhd is a
major independent oil and gas company based in
Malaysia with an expected life of field production
of approximately 260 mn boe and strong growth
prospects.
Key projects
Neptun (Romania, OMV 50%)
Neptun Deep represents the deepwater sector of
the XIX Neptun block in the Romanian Black Sea,
where OMV Petrom is conducting activities through
a joint venture with ExxonMobil (operator). Follow-
ing the first gas discovery made during the 2011/
2012 exploration drilling campaign (Domino-1 well),
extensive seismic acquisitions and further explo-
ration and appraisal drilling, including well testing,
were performed. Engineering, contracting, and
regulatory activities took place during 2018. New
legislation covering offshore operations came into
force on November 17, 2018, providing the regu-
latory framework for offshore projects in the Roma-
nian section of the Black Sea. This current legis-
lative environment does not provide the necessary
prerequisites for a multi-billion investment decision.
OMV Petrom remains keen to see the Black Sea
developed and will therefore continue the dialogue
with the authorities to understand the way forward.
67
OMV success-
fully closed the
acquisition of Shell’s
Upstream business
in New Zealand
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Successful
production start
of Aasta Hansteen
in December
Other major projects (Romania, OMV 100%)
In 2018, around EUR 90 mn were invested in the
modernization, extension, and construction of new
oil and gas processing facilities and pipelines. The
CHD (Central Hydrocarbon Dewpointing) Hurezani
project, whose scope involved building a new
low-temperature separation unit and related pipe-
lines, has achieved significant progress toward a
start-up in the first half of 2019.
Gudrun (Norway, OMV 24%)
The Equinor-operated Gudrun field continued with
a high level of production from the existing plat-
form wells, mainly as a consequence of delayed
field decline and increased in-place volumes.
During 2018, the license group initiated an improved
oil recovery project which includes new wells and
a change in drainage strategy by water injection;
this will be further matured in 2019.
The Offshore Rejuvenation Program kicked off in
2015 consists of various projects aimed at upgrading
the offshore facilities and pipelines, reducing
operational risk, and increasing process safety, with
a total estimated investment expected to exceed
EUR 200 mn by 2023. Achievements in 2018 included
an upgrade of the fire and gas detection systems
on all platforms, an upgrade of cranes, and installa-
tion of riser protection.
Yuzhno Russkoye (Russia, OMV 24.99%)
To sustain plateau production in the Gazprom-
operated Yuzhno Russkoye gas field, a 135 well
drilling campaign targeting the Turonian layer was
launched in October 2018. Alongside the existing
three producing Turonian wells, four additional
wells were completed in 2018 and eight more wells
are expected to be completed in 2019. In addition,
the operator initiated a project to investigate the
potential of the field’s deeper layers, which will be
further assessed in 2019.
Gullfaks (Norway, OMV 19%)
At the Equinor-operated Gullfaks field, with 183 wells
available for production/injection, 13 platform
wells were re-drilled and completed in 2018. The
new Cat J rig arrived in Norway in Q1/18 and has
re- drilled and completed two subsea wells. This
jack-up J rig is specially designed to perform effi-
cient drilling operations on subsea development
solutions in addition to the conventional surface
drilling from the three fixed platform rigs. A PDO 1
amendment for implementing water injection in
the producing Shetland/Lista formation was issued
to the authorities in late December 2018.
Edvard Grieg (Norway, OMV 20%)
The Edvard Grieg offshore oil field, operated by
Lundin, produced at a level significantly above
expectations due to high facility uptime through-
out 2018. The field development plan was success-
fully completed in 2018 by drilling the last four
wells of the fourteen-well program.
Aasta Hansteen (Norway, OMV 15%)
In 2018, the Aasta Hansteen platform was success-
fully transported to the location, hooked up, and
commissioned. Production start-up was on Decem-
ber 16, 2018. All development wells were completed
in 2018.
Wisting (Norway, OMV 25%)
The Wisting discoveries are located in the Hoop area
of the Barents Sea in PL537, approximately 310 ki-
lometers from the mainland of Norway. OMV is the
operator of Wisting with 25% working interest. The
current reference concept for the Wisting develop-
ment is an FPSO with a subsea production system
consisting of 19 producers and 15 water injectors.
Two FPSO concepts in the form of a circular and
a ship-shaped hull are being matured, and the final
concept selection in the license group is expected in
2020. The recoverable resources in PL537 reported
to the Norwegian Petroleum Directorate for 2018
are estimated at around 440 million barrels of oil
compared to 350 million barrels in 2017.
Nawara (Tunisia, OMV 50%)
By the end of 2018, the OMV operated onshore
Nawara gas condensate field development project
was around 97% completed, falling behind schedule
due to further social unrest in South Tunisia. The
pipeline is approaching mechanical completion,
while both the gas treatment plant in Gabes and the
central processing facility have been delayed by
protests and strikes. Nonetheless, OMV continues
1 PDO – Plan of Development and Organization
68
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT to work with partners and contractors on solutions
to minimize any further delay. The first gas delivery
from the Nawara pipeline is expected towards the
end of 2019.
Umm Lulu and SARB (UAE, OMV 20%)
Umm Lulu and Satah Al Razboot (SARB) are two
offshore oil fields situated in the shallow waters of
Abu Dhabi. Both fields are connected via pipelines
to dedicated processing, storage, and loading facil-
ities on Zirku Island. The full field facilities and
infrastructures of the Umm Lulu field are expected
to be finalized by 2020 with development drilling
to continue until 2023. OMV has been appointed as
Asset Lead for Umm Lulu.
Production start-up of the Umm Lulu and SARB
fields was achieved in September 2018 and showed
an initial capacity of 50 kboe/d (10 kboe/d net to
OMV), ramping up to approximately 125 kboe/d
(25 kboe/d net to OMV) in December 2018. Produc-
tion from the concession area is expected to increase
to 215 kboe/d (43 kboe/d net to OMV) by 2023.
Exploration and appraisal highlights
In 2018, OMV completed the drilling of 16 explora-
tion and appraisal wells1 in four different countries,
of which ten were successful, including two already
on production. The drilling of four wells was on-
going at year end, with three wells being finalized
by March 2019.
In Norway, four exploration wells were finalized,
two of which were successful, additionally one was
ongoing at year end. The highlight was the High
Pressure, High Temperature (HPHT) exploration well
6506/11-10 in the Norwegian Sea (PL644), where
OMV was the operator. The well had two targets
(Hades and Iris) and discovered significant gas and
condensate volumes. Further appraisal is planned
for 2019. Additionally, three appraisal wells were
drilled and all were successful.
In Romania, following Repsol’s country exit, OMV
Petrom became the sole titleholder and operator
of four onshore exploration licenses in the Getic
region. Five exploration wells were finalized, of
which two discovered hydrocarbons, while one was
ongoing at year end. Of these two complex and
deep exploration wells will be further tested in the
first part of 2019.
In Austria, two exploration wells and one appraisal
well, which included a deeper exploration target,
were finalized in 2018, all of them hydrocarbon-bear-
ing. One well was ongoing at year end.
Two seismic surveys in New Zealand and Austria
were finalized in 2018. In Austria, 600 km2 of seismic
data was acquired northeast of Vienna and focused
on potential deeper targets. An extension of the
survey (in total ~ 1,500 km2) was commenced in
Octo ber 2018 and was ongoing at year end.
Exploration and appraisal expenditures increased
to EUR 300 mn in 2018 (2017: EUR 230 mn). The
increased spend reflects higher activity levels, an
improved success rate, and higher equity levels in
the Romanian activities.
Reserves development
Proved reserves (1P) as of December 31, 2018,
increased to 1,270 mn boe (thereof OMV Petrom 2:
532 mn boe). With 180%, the one-year Reserve
Replacement Rate (RRR) was in the same order of
magnitude than last year (2017: 191%) and far above
the average in the past. The three-year average RRR
grew to 160% (2017: 116%). The increase in proved
reserves was mainly induced by the acquisition of
a 20% share in the offshore concessions Umm
Lulu and SARB in the United Arab Emirates and the
successful development of the Turonian reservoir
in the Russian gas field Yuzhno Russkoye. Further
significant revisions were made due to the increase
of our shares in New Zealand as well as the posi-
tive production performance and successful devel-
opment activities in Norway.
Proved and probable reserves (2P) increased to
2,157 mn boe (thereof OMV Petrom 2: 810 mn boe)
mostly due to the acquisitions in the United Arab
Emirates and New Zealand.
1 Of which seven were operated by OMV
2 OMV Petrom covers Romania and Kazakhstan.
69
Three-year average
Reserve Replacement
Rate grew to 160%
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT OMV collaborates with leading international univer-
sities (e.g., University of Cambridge, Stanford
University, TU Wien, Montanuniversität Leoben,
Johannes Kepler University Linz, University of
Natural Resources and Life Sciences, Vienna) as
well as international research institutes (e.g.,
Fraunhofer, Forschungszentrum Jülich, Austrian
Institute of Technology, Joanneum Graz) and
engages in research collaborations with industry
partners and research initiatives globally.
With DigitUP, OMV Upstream aims to move up to
the league of “digital frontrunners” in the oil and
gas industry. By 2025, digital technologies and fully
integrated work methods are expected to be at
top international level, making the business more
secure and more profitable. In this way, OMV will
make the working environment more attractive for
new and existing employees and open the door to
new partnerships.
The DigitUP program will be implemented in two
stages: The first phase spans the next three years,
during which the aim is to implement state-of-the-
art systems for OMV’s exploration and production
activities, create trust in these new technologies
among employees, and enable them to use them in
their routine work. In the second phase, which has
2025 as its target, the aim is to become a digital
frontrunner.
Innovation and new technologies
OMV’s Upstream strategy is driven by state-of-the-
art in-house technologies supported by access to
well-maintained assets to pilot these technologies
and promote rapid full-field implementation world-
wide. The current focus on research and develop-
ment activities continues to improve recovery rates
and the lifetimes of mature fields and enable high-
ly efficient exploration of oil and gas fields even in
challenging environments.
OMV applies various enhanced oil recovery methods
with a special focus on intelligent water injection
projects summarized in the Smart Oil Recovery 3.0
program (SOR 3.0). This enables OMV to increase
the ultimate oil recovery by up to 15 percentage
points in selected fields and thus extend field life.
In 2018, two horizontal production wells and one
injection well were drilled in the Matzen field in
Austria. In total, more than 230 kboe of incremental
oil were produced by SOR 3.0 by the end of 2018.
Furthermore, research and development cooperation
with Total and Gazprom was still ongoing in 2018.
OMV continued to work on the pilot scale testing
of innovative technologies in produced water treat-
ment. The handling of back-produced water is one
of the key aspects enabling cost-efficient SOR 3.0.
Increasingly complex reservoir fluids conditions
lead to faster degradation of pipelines and process-
ing equipment. To address this, OMV Upstream is
building up its expertise in the application of nano-
technology products. In 2018, an ongoing pilot test
to prevent paraffin deposition in well bores and
reduce wear in sucker rod pumps showed promising
preliminary results and was therefore extended
to additional fields. Further areas of research are
nanocoatings for corrosion and scale protection.
70
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Downstream
OMV’s Downstream business consists of Downstream Oil and Downstream Gas. Downstream Oil has
three refineries in Central and Eastern Europe, two of which have strong petrochemical integration.
OMV operates a retail network of approximately 2,100 filling stations in Europe. Downstream Gas is
active along the entire gas value chain. Gas sales volumes amounted to 114 TWh.
At a glance
Clean CCS Operating Result 1
thereof Downstream Oil
thereof Downstream Gas
Special items
CCS effects: inventory holding gains/(losses) 1
Operating Result
Capital expenditure 2
Downstream Oil KPIs
OMV indicator refining margin 3
Ethylene/propylene net margin 3,4
Utilization rate refineries
Total refined product sales
thereof retail sales volumes
thereof petrochemicals
Downstream Gas KPIs
Natural gas sales volumes
Net electrical output
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in EUR mn
in USD/bbl
in EUR/t
in mn t
in mn t
in mn t
2018
1,643
1,439
204
(219)
(4)
1,420
576
5.24
448
92%
20.26
6.33
2.41
2017
1,770
1,554
217
(1,242)
55
584
580
6.05
427
90%
23.82
8.13
2.15
∆
(7)%
(7)%
(6)%
82%
n.m.
143%
(1)%
(13)%
5%
2%
(15)%
(22)%
12%
in TWh
in TWh
113.76
5.06
113.40
7.10
0%
(29)%
Note: OMV Petrol Ofisi was divested on June 13, 2017.
1 Current Cost of Supply (CCS): Clean CCS figures exclude special items and inventory holding gains/losses (CCS effects) resulting from the fuels refineries
and OMV Petrol Ofisi.
2 Capital expenditure including acquisitions
3 Actual refining and petrochemical margins realized by OMV may vary from the OMV indicator refining margin, ethylene/propylene net margin, as well
as from the market margins due to factors including a different crude slate, product yield, operating conditions, and a different feedstock.
4 Calculated based on West European Contract Prices (WECP) with naphtha as feedstock
Financial performance
The clean CCS Operating Result came down from
EUR 1,770 mn to EUR 1,643 mn in 2018 mainly due
to a lower result in Downstream Oil.
The Downstream Oil clean CCS Operating Result de-
clined in 2018 by EUR 114 mn to EUR 1,439 mn. This
was mainly a result of the divestment of OMV Petrol
Ofisi in June 2017, which contributed EUR 98 mn to
the 2017 result, as well as of a weaker refining mar-
ket environment. The OMV indicator refining margin
decreased by 13% from USD 6.0/bbl to USD 5.2/bbl.
Increased crude prices resulted in higher feedstock
costs negatively impacting the indicator refining
margin. While middle distillate margins improved,
gasoline and heavy fuel oil margins declined. The
utilization rate of the refineries came in at a very
high rate of 92% in 2018 (2017: 90%) despite the
planned six-week turnaround at the Petrobrazi refin-
ery in Q2/18. At 20.3 mn t, total refined product
sales decreased by 15% following the divestment
of OMV Petrol Ofisi in Q2/17, which contributed
4.0 mn t in 2017. Excluding OMV Petrol Ofisi, total
refined product sales grew slightly. In the retail
business, sales volumes and margins increased. In
the commercial business, sales volumes rose, while
margins were slightly below 2017 levels. Further-
more, the commercial business in Germany and
Austria profited from supply disruptions in southern
Germany caused by extremely low Rhine water
levels and a refinery outage. OMV Petrom contrib-
uted EUR 286 mn (2017: EUR 336 mn) to the clean
CCS Operating Result of Downstream Oil.
71
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT High refinery
utili zation rate
at 92%
Downstream Oil
Downstream Oil operates along the entire oil value
chain: It processes equity and third-party crude and
other feedstock in three highly competitive inland
refineries with an annual capacity of 17.8 mn t in
Schwechat (Austria), Burghausen (Germany), and
Petrobrazi (Romania). In Austria and Germany,
OMV is forward integrated into petrochemicals, with
Borealis (OMV stake 36%) as a key customer. Total
annual petrochemical production, including Roma-
nia, amounts to a capacity of 2.5 mn t. Furthermore,
OMV markets refined products to commercial
customers as well as through its retail network of
2,064 filling stations, with total refined product sales
of 20.3 mn t.
Refining including product supply and sales
The rise in crude oil prices in the course of 2018 put
refining margins under pressure, which on average
were slightly below the 2017 level. However, despite
the year-on-year decline, refining economics are
still healthy, supported by strong demand for middle
distillate and some logistical issues in Europe
keeping inland premia at high levels. The overall
capacity utilization rate in 2018 reached a very high
level of 92% (2017: 90%) despite planned turn-
around activities at the Petrobrazi refinery and the
planned small-scale maintenance activities at the
Burghausen refinery.
The regional proximity of the three sites allows
OMV to operate them as one integrated refinery
system. Intermediate feedstocks are exchanged
between the refineries in order to optimize product
flows and maximize returns. This system allows
to strategically align investments, the full capitaliza-
tion on the flexibilities in shifting output toward
high-value products, and leveraging economies of
scale.
In the petrochemical business, sales volumes were
higher than in 2017, since there were no major turn-
around activities at the Schwechat and Burghausen
refineries. Increased sales volumes from Schwechat
made a significant contribution. Average petro-
chemical margins, which were particularly high in
Q4/18, were below the 2017 average. In the first
half of 2018, butadiene prices in particular faced
higher-than-expected naphtha prices. However, the
improvement in demand in both Europe and the
United States led to higher margins in the second
half of 2018 and maintained them at a healthy level
The clean CCS Operating Result of the petrochem-
icals business increased by 12% to EUR 275 mn
(2017: EUR 245 mn). The ethylene/propylene net
margin increase was offset by declining petrochem-
ical margins for butadiene and benzene. Further-
more, last year’s result was negatively impacted
by the planned turnaround at the Schwechat petro-
chemicals unit. Borealis’s contribution to the
clean Operating Result declined by EUR 39 mn to
EUR 360 mn (2017: EUR 399 mn) mainly as a result
of lower polyolefin margins and a challenging
fertilizer market environment, partially offset by a
strong Borouge result.
The Downstream Gas clean CCS Operating Result
declined from EUR 217 mn to EUR 204 mn in 2018.
The result in 2017 was supported by positive one-
off valuation effects. The performance of Gas Con-
nect Austria increased from EUR 97 mn in 2017
to EUR 102 mn. This was mainly attributable to a
higher contribution from participations and an in-
surance compensation related to the Baumgarten
incident in 2017, partially offset by the expiration
of long-term contracts and higher energy costs.
Natural gas sales volumes were flat at 113.8 TWh
(2017: 113.4 TWh), and higher sales volumes in
Germany were offset by lower sales in Romania and
Turkey. Net electrical output dropped from 7.1 TWh
to 5.1 TWh in 2018: While the Brazi power plant
in Romania increased its output, it could not offset
the missing share of the Samsun power plant fol-
lowing its divestment in Q3/18. OMV Petrom contrib-
uted EUR 77 mn (2017: EUR 50 mn) to the clean
CCS Operating Result of Downstream Gas.
The Downstream Operating Result surged from
EUR 584 mn to EUR 1,420 mn in 2018. The 2018
result reflects net special items of EUR (219) mn
mainly related to the divestment of the Samsun
power plant and an impairment of the Borealis fer-
tilizer business. In 2017, net special items were
EUR (1,242) mn, reflecting the recycling of FX losses
following the divestment of OMV Petrol Ofisi. CCS
effects of EUR (4) mn were booked due to decreas-
ing crude prices.
Capital expenditure in Downstream amounted to
EUR 576 mn (2017: EUR 580 mn). Capital expen-
diture in Downstream Oil grew by EUR 16 mn to
EUR 506 mn (2017: EUR 491 mn), which was mainly
due to increased investments in OMV Petrom and
partially offset by the divestment of OMV Petrol
Ofisi in Q2/17. Downstream Gas capital expendi ture
decreased to EUR 70 mn (2017: EUR 90 mn), reflect-
ing mainly the divestment of the Samsun power
plant.
72
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Substantial
Borealis contribution
following excellent
Borouge result
Robust Retail
performance
further increased
average throughput
until the end of the year. Benzene margins have
been under pressure since Q2/18, driven by an
oversupplied European market. The decline in buta-
diene and benzene margins was not offset by the
increase in propylene margins.
Annual refining capacities
In mn t
Schwechat (Austria)
Burghausen (Germany)
Petrobrazi (Romania)
Total
9.6
3.8
4.5
17.8
Retail
The Retail business continued its strong perfor-
mance in 2018 and proved to be a stable outlet for
refinery products as well as a strong cash gener ator.
Due to the impact of the OMV Petrol Ofisi divest-
ment in Q2/17, the total sales volume dropped by
22% to 6.3 mn t. Nevertheless, the average through-
put increased again by 1% on the back of strong
performance in all key markets and a favorable
market environment. At the end of the year, the net-
work comprised 2,064 filling stations (2017: 2,039).
OMV continues to focus on its successful multi-
brand strategy with a planned further expansion
in Germany based on an agreement with Aldi Süd.
The OMV brand is positioned as a premium brand,
with VIVA representing a strong shop, gastronomy,
and service offering. The brand of the unmanned
Avanti station stands for discount, and the Petrom
brand represents value for money. This strategy
has continued to deliver good results, while profit-
ability per site has continued to increase. OMV’s
premium brand MaxxMotion demonstrated top per-
formance and reflected its premium quality focus,
although fuel price levels increased overall com-
pared with previous years. The non-oil business,
such as the VIVA convenience stores and car wash,
continued its sustainable and very positive devel-
opment with a higher contribution than in 2017. The
focus on the high-quality products and services in
the premium filling station network remains one of
the key differentiators.
Borealis
Despite the drop versus 2017, Borealis benefited
from solid integrated polyolefin margins and con-
tributed substantially to the clean Operating Result
with EUR 360 mn in 2018 (2017: EUR 399 mn).
Another outstanding year was again supported by a
weakening, but still healthy olefin and polyolefin
market environment, which overcompensated for
the continued downturn in fertilizers. That segment
suffered from lower demand and higher gas prices.
In addition, Borealis’s joint venture with the Abu
Dhabi National Oil Company, Borouge, benefited
from strong margins and again delivered an excel-
lent result.
In September 2018, Bayport Polymers, the 50/50
joint venture of Total and Novealis Holdings (50/50
joint venture of Borealis and NOVA Chemicals),
announced the final investment decision for the
construction of a polyethylene plant in Bayport,
Texas, with production capacity of 625,000 t per
year.
In October 2018, following the successful comple-
tion of Front-End Engineering Design (FEED), Bore-
alis made the final investment decision for a new
world-scale Propane Dehydrogenation (PDH) plant.
The facility will be located at Borealis’s existing
production site in Kallo (Antwerp), Belgium. Com-
missioning of the plant is scheduled for the first
half of 2022. The PDH plant will have a target pro-
duction capacity of 750,000 t per year.
In addition, Borealis acquired the Austrian plastics
recycler Ecoplast Kunststoffrecycling GmbH (Eco-
plast). Based in Wildon, Austria, Ecoplast processes
around 35,000 t of post-consumer plastic waste
per year from households and industrial customers
into Low-Density Polyethylene (LDPE) and High-
Density Polyethylene (HDPE) recyclates, mainly but
not exclusively for the plastic film market.
Downstream Gas
Downstream Gas operates across the gas value
chain from the wellhead to the burner tip of the
end customer with a fully integrated gas business.1
It includes the Group’s power business activities,
with one gas-fired power plant in Romania.
Supply, marketing and trading
OMV markets and trades natural gas in eight Euro-
pean countries (Austria, Germany, Netherlands,
Romania, Hungary, Italy, Slovenia, and France) as
well as in Turkey. Total gas sales in 2018 amounted
to 113.8 TWh (2017: 113.4 TWh). The supply port-
folio consists of equity gas and a diversified set of
international suppliers. In addition, short-term
activities on the main international hubs comple-
ment OMV’s dynamic supply portfolio.
1 OMV’s gas business is operated in strict adherence to the applicable gas unbundling rules.
73
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT OMV Gas Marketing & Trading GmbH (OMV Gas)
sales activities are focused on the large industry
and municipality segments. In 2018, OMV Gas had
a local presence in Austria, Germany, Hungary, and
the Netherlands. External sales in these countries
amounted to 65.2 TWh, an increase of 15% com-
pared with 2017. Italy, Slovenia, and France are cov-
ered by origination activities. This is a substantial
achievement given the challenging market environ-
ment. Margins remained under pressure due to
the competitive and increasingly volatile European
gas market situation. This situation is expected to
continue in the future. In Germany, OMV Gas plans
to achieve a market share of 10% by 2025, a target
that is well on track. By the end of 2018, sales had
reached 25.4 TWh, an increase of 49% over the pre-
vious year and a market share of 3%.
In Romania, OMV Petrom Gas activities achieved
an excellent clean CCS Operating Result. In the con-
text of a still volatile regulatory framework, natural
gas sales to third parties decreased year on year
and reached around 38.9 TWh in 2018. In Turkey,
natural gas sales decreased from 10.9 TWh in 2017
to 8.6 TWh in 2018.
Gas logistics
OMV runs gas storage facilities in Austria and
Germany with a storage capacity of 30 TWh and
holds a 65% stake in the Central European Gas
Hub (CEGH), an important gas trading hub in Cen-
tral and Eastern Europe. OMV’s subsidiary Gas
Connect Austria operates an approximately 900 km
long high-pressure natural gas pipeline network
in Austria.
The Entry/Exit transport volumes declined by 6% in
2018 compared with the high level of 2017 mainly
due to the unusually warm weather toward the end
of the year and lower consumption for electricity
generation.
The Austrian gas storage market was again charac-
terized by low summer/winter spreads below
EUR 1/MWh. After a very low filling level of 6% in
April 2018 due to cold spells in Q1/18, the storage
level reached a relatively low maximum of 75% in
November 2018 (November 2017: 98%). The rela-
tively low 2018 storage level was mainly caused by
high summer gas prices and correspondingly low
spreads to winter forward prices.
659 TWh new
record volume
nominated
at CEGH-VTP
In 2018, OMV Gas also improved the capacity uti-
lization of of the Gate regasification terminal. OMV
Gas has concluded another important midterm
LNG deal, under which a number of LNG cargoes
will be delivered to Europe. These LNG cargoes
will provide an additional source of gas supply to
meet OMV’s ambitious sales growth targets in
Northwest Europe, while further enhancing the
security of supply for OMV’s geographically diverse
supply portfolio.
At the Central European Gas Hub, 659 TWh of natu-
ral gas were nominated at the Virtual Trading Point
(VTP) in 2018, an increase of 6% compared with
2017. On the PEGAS CEGH Gas Exchange Market,
133 TWh were traded in Austria in 2018, an increase
of almost 50% versus last year. Both results are
new all-time highs in the history of CEGH. CEGH
launched the CEGH Gas Storage Marketing Plat-
form in November 2018, a new service that enables
gas storage operators to offer storage capacity.
Construction of Nord Stream 2 has commenced in
2018 and at year end 2018 about 400 km of pipes
were laid in German, Finnish, and Swedish waters.
In 2018, OMV provided funds of EUR 275 mn,
bringing OMV’s total current drawdowns under
the financing agreements for Nord Stream 2 to
approximately EUR 600 mn.
OMV Gas has successfully closed the divestment
of the Samsun power plant in Turkey. The closing
of this transaction marked the last step toward
streamlining our power business. OMV Gas power
business was positively affected by high power
prices in Romania, which led to a good financial
result. Net electrical output declined to 5.1 TWh.
While the Brazi power plant in Romania increased
its output, it could not offset the missing contribu-
tion from the divested Samsun power plant. The
financial impact of the non-availability of one power
transformer at the Brazi power plant (Romania) for
more than half the year in 2017 was compensated
by a business interruption insurance in 2018.
74
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT ReOil®: an
OMV approach
towards circular
economy
Innovation and new technologies
OMV actively explores alternative feedstock, tech-
nologies, and fuels with the aim of developing a
well-diversified, competitive future portfolio. Efforts
and resources focus on the production of sustain-
able biofuels and advanced fuels, future energy for
transportation, and innovative solutions.
OMV is consequently developing new technologies
such as Co-Processing to improve the quality and
stability of fuels with biogenic components. Tradi-
tionally, the biogenic component is blended to the
fuel after production. Co-Processing introduces the
biogenic feedstock already in the production pro-
cess. This concept enables OMV to produce trans-
portation fuels from various biogenic feedstock
such as domestic rapeseed oil, used cooking oil, or
algae oil using existing refinery plants. In 2018,
OMV continued its development efforts in the field
of Co-Processing of renewable feedstock through
further tests in laboratories and pilot plants. The
focus was on fine-tuning the technical concept in
terms of product quality, biogenic yields, and utili-
ty consumption.
OMV is also active in the production of advanced
fuels that are not in direct competition with food.
In cooperation with the Christian Doppler Labora-
tory in Cambridge, OMV is investigating approaches
to converting CO2 and water into synthesis gas
using sunlight and catalysts. This synthesis gas can
then be converted into liquid fuels. In addition, OMV
participates in various funded research projects
with external partners, e.g., the conversion of CO2
and biowaste into alcohols in collaboration with
the TU Wien (Vienna University of Technology) and
the liquefaction of biowaste to bio-based crude oil
together with the Montanuniversität Leoben.
At the beginning of 2018, the European Commission
introduced the new Circular Economy Package
with the aim of increasing the recycling rates for
plastics and minimizing the release of plastics into
the environment. Refinery post-consumer and
post-industrial plastics are already being recycled
into synthetic crude oil in a pyrolysis process in
OMV’s ReOil® pilot plant at the Schwechat refinery
(a proprietary OMV technology). This synthetic
crude can be processed into any desired refinery
product. Mechanical completion of the pilot plant
with a capacity of 100 kg/h was reached at the end
of 2017. In 2018, OMV operated and further im-
proved the pilot plant to prepare the next scale-up
steps to industrial scale.
OMV is actively involved in the development of
alternative fuels in major mobility applications in
order to stay abreast of market developments for
emissions reductions.
OMV holds 40% of SMATRICS, Austria’s largest
e-mobility provider. SMATRICS currently operates
428 charging stations at 166 publicly accessible
locations. SMATRICS is also an enabler for e-mobil-
ity and offers a complete B2C and B2B service
package. OMV also works with IONITY – High-Power
Charging. This is available at seven OMV locations
with more planned in the near future. With the OMV
e-mobility card, ROUTEX customers can seamlessly
use their fuel of choice.
Compressed natural gas (CNG) and liquefied natu-
ral gas (LNG) can reduce CO2 and particulate emis-
sions from vehicles by 20% and 90%, respectively.
To exploit this potential, OMV is conducting a stra-
tegic evaluation on LNG as an alternative fuel for
heavy-duty vehicles. In addition, first activities with
industrial partners to increase utilization of the
existing CNG network in Austria have commenced.
As a pioneer in hydrogen mobility, OMV currently
operates five hydrogen filling stations in Austria
and is a joint venture partner of H2 MOBILITY, whose
goal is to operate a Germany-wide hydrogen filling
station network by the end of 2023. Several initia-
tives for the production and use of hydrogen are
being promoted by OMV across a number of sec-
tors, aimed at unlocking the potential of the fuel and
positioning OMV accordingly.
75
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Outlook
Market environment
Downstream
For the year 2019, OMV expects the average Brent
oil price to be at USD 65/bbl (2018: USD 71/bbl).
In 2019, average European gas spot prices are
anticipated to be lower compared to 2018.
Group
In 2019, organic capital expenditure (including
capitalized exploration and appraisal expenditure
and excluding acquisitions) is projected to come
in at EUR 2.3 bn (2018: EUR 1.9 bn).
Upstream
OMV expects total production to be around 500 kboe/d
in 2019 (2018: 427 kboe/d). The pro duction at El
Sharara in Libya resumed in March 2019, and we
assume from the middle of March until December
an average production contribution from Libya of
35 kboe/d (2018: 30 kboe/d) depending on the secu-
rity situation. The organic capital expenditure for
Upstream (including capitalized exploration and
appraisal expenditure and excluding acquisitions)
is anticipated to come in at EUR 1.5 bn in 2019.
In 2019, exploration and appraisal expenditure is
expected to be at EUR 350 mn (2018: EUR 300 mn).
In 2019, the refining indicator margin will be at the
level of around USD 5/bbl (2018: USD 5.2/bbl).
Petrochemical margins will be slightly lower than
in 2018 (2018: EUR 448/t). The total refined product
sales in 2019 are forecasted to be on a similar level
compared to 2018 (2018: 20.3 mn t). In OMV’s mar-
kets, retail and commercial margins are predicted
to be similar compared to those in 2018. There is
no planned turnaround of the refineries in 2019.
Therefore, the utilization rate of the refineries is
expected to be higher than in 2018 (2018: 92%).
The natural gas sales volumes in 2019 are projected
to be above to those in 2018 (2018: 114 TWh). Natural
gas sales margins are forecasted to be lower in
2019 compared to 2018. Due to the divestment of
the Samsun power plant in Turkey in Q3/18, the
net electrical output in 2019 will be lower than in
2018 (2018: 5.1 TWh). The net electrical output of
the Brazi power plant in Romania is expected to
be above the level of 2018. OMV will continue to
finance the Nord Stream 2 pipeline.
Information about the longer-term outlook can be
found in the Strategy chapter (page 43).
76
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Risk Management
Like the entire oil and gas industry, OMV is exposed to a variety of risks – including market and financial
risks, operational risks, and strategic risks. The Group’s risk management processes focus on risk iden-
tification, assessment, and evaluation of such risks and their impact on the Group’s financial stability and
profitability in order to actively manage them in the context of the Group’s risk appetite and defined
risk tolerance levels.
It is OMV’s view that the Group’s overall risk is sig-
nificantly reduced due to its integrated nature and
the related, partially offsetting effects of different
risks. The balancing effects of offsetting industry
risks, however, can often lag or weaken. Therefore,
OMV’s risk management activities focus on the
Group-wide net risk exposure of the existing and
future portfolio. The interdependencies and cor-
relations between different risks are also reflected
in the Company’s consolidated risk profile. The
areas of risk management and insurance are cen-
trally coordinated at the corporate level within the
Treasury and Risk Management department, which
ensures that well-defined and consistent risk
management processes, tools, and techniques are
applied across the entire organization. Risk owner-
ship is assigned to those managers who are best
suited to oversee and manage the related risk.
The overall objective of the risk policy is to safe-
guard the cash flows required by the Group and to
maintain a strong, investment-grade credit rating
in line with the Group’s risk appetite.
Enterprise Wide Risk Management
Non-financial and financial risks are regularly
identified, assessed, and reported through the
Group-wide Enterprise Wide Risk Management
(EWRM) process.
The main purpose of the OMV Group’s EWRM is to
deliver value through risk-based management and
decision-making. Assessment of financial, opera-
tional, and strategic risks supports the exploitation
of business opportunities in a systematic manner
in order to ensure sustainable growth in OMV’s
value. Since 2003, the EWRM system has helped
enhance risk awareness and risk management
skills across the entire organization, including sub-
sidiaries in more than 20 countries. The OMV
Group is constantly enhancing the EWRM based
on internal and external requirements.
A cross-functional committee chaired by the OMV
Group CFO with senior management members of
the OMV Group – the Risk Committee – ensures
that the EWRM effectively captures and manages
the material risks across the OMV Group.
The process is facilitated by a Group-wide IT system
supporting the established individual process steps:
risk identification, risk analysis, risk evaluation, risk
treatment, reporting, and risk review through con-
tinuous surveillance of changes to the risk profile.
The overall risk resulting from the bottom-up risk
management process is computed using Monte
Carlo simulations and compared against planning
data. This is further combined with a senior man-
agement view from a top-down approach to capture
the risks implied in the strategy. This process also
includes those companies that are not fully consol-
idated. Twice a year, the results from this process
are consolidated and presented to the Executive
Board and the Audit Committee. In compliance with
the Austrian Code of Corporate Governance, the
effectiveness of the EWRM system is evaluated
by the external auditor on an annual basis. The key
nonfinancial and financial risks identified with
respect to OMV’s medium-term plan are:
Operational risks, including all risks related to
physical assets, production risks, project risks,
personnel risks, IT risks, HSSE and regulatory/
compliance risks
Strategic risks arising, for example, from changes
in technology, risks to reputation or political
uncertainties, including sanctions
Financial risks including market price risks and
foreign exchange risks
77
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT OMV operates and has financial investments in
countries that are subject to political uncertainties,
in particular Libya, Kazakhstan, Yemen, Pakistan,
Russia, Tunisia, and Turkey. Possible political chang-
es may lead to disruptions and limitations in pro-
duction as well as an increased tax burden, restric-
tions on foreign ownership, or even nationalization
of property. However, OMV has extensive experi-
ence in the political environment in Central, Eastern,
and Southeastern Europe, and political develop-
ments in all markets where OMV operates are kept
under constant observation. Country- specific risks
are assessed before entering new countries. An
analysis to assess the potential impact of a hard
Brexit scenario on OMV Group companies was
under taken, which showed that there is no signifi-
cant impact expected. OMV also evaluates the risk
of potential US or EU sanctions and their impact on
planned or existing operations with the aim to stay
in full compliance with all applicable sanctions.
In particular risks due to US sanctions on the Nord
Stream 2 project and on OMV’s activities in Russia
are regularly assessed and monitored. Risks related
to the EU Emissions Trading System are separately
recorded and aggregated for the Group as a whole.
Furthermore, OMV is monitoring emerging regula-
tions related to climate change and decarbonization
in all operating countries. Through systematic staff
succession and development planning, Corporate
Human Resources plans for suitable managerial
staff to meet future growth requirements in order to
mitigate personnel risks. The OMV Group is exposed
to a wide range of health, safety, security, and
environmental risks that could result in significant
losses.
Control and mitigation of assessed risks takes place
at all organizational levels using clearly defined
risk policies and responsibilities. The key Group
risks are governed centrally to ensure the ability to
meet the planning objectives through the essence
of corporate directives, including those relating to
health, safety, security, environment, legal matters,
compliance, human resources, and corporate social
responsibility, with special emphasis on human
rights and market price risks.
Financial Risk Management
Market price and financial risks arise from volatility
in the prices of commodities, foreign exchange
(FX) rates, and interest rates. Also of importance
are credit risks, which arise from the inability of
a counterparty to meet a payment or delivery com-
mitment. As an oil and gas company, OMV has a
significant exposure to oil and gas prices. Substan-
tial FX exposures include the USD, RON, NOK, NZD,
and RUB. The Group has a net USD long position,
mainly resulting from sales of oil production. The
comparably less significant short positions in RON,
NOK, and RUB originate from expenses in local
currencies in the respective countries.
Management of market price risk and FX risk
Analysis and management of financial risks arising
from foreign currencies, interest rates, commodity
prices, counterparties, liquidity, and insurable risks
are undertaken in a consolidated way at the cor-
porate level. Market price risk is monitored and
analyzed centrally in respect of the potential cash
flow impact using a specific risk analysis model
that considers portfolio effects. The impact of finan-
cial risks (e.g., market prices, currencies) on the
OMV Group’s cash flow and liquidity are reviewed
quarterly by the Risk Committee, which is chaired
by the CFO and comprised of senior management
of the Business Segments and corporate functions.
The Risk Committee is also responsible for review-
ing the risk governance framework of the OMV
Group and proposing changes to the OMV Executive
Board.
In the context of market price risk and FX risk, the
OMV Executive Board decides on hedging strate-
gies to mitigate such risks whenever deemed neces-
sary. To protect the Group’s cash flow from the
potential negative impact of falling oil and gas
prices in the Upstream business, OMV uses finan-
cial instruments for hedging purposes.
In the Downstream business, OMV is especially
exposed to volatile refining margins and inventory
risks. In order to mitigate those risks, corresponding
hedging activities are undertaken. Those include
margin hedges as well as stock hedges. In addition,
78
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Emission Compliance Management ensures a
balanced position of emission allowances by selling
the surplus or covering the gap.
Management of interest rate risk
To balance the Group’s interest rate portfolio, loans
can be converted from fixed to floating rates and
vice versa according to predefined rules. OMV reg-
ularly analyzes the impact of interest rate changes
on interest income and expense from floating rate
deposits and borrowings. Currently the effects of
changes in interest rates are not considered to be a
material risk.
Management of credit risk
The main counterparty credit risks are assessed,
monitored, and controlled at the Group and seg-
ment level using predetermined credit limits for all
counterparties, banks, and security providers. The
procedures are governed by guidelines at the OMV
Group and OMV Petrom level.
For further details on risk management and the use of
financial instruments, please refer to Note 28 of the
Consolidated Financial Statements.
For further details on climate change related risks and
their management, see the OMV Sustainability Report
2018.
79
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT Other Information
Information required by section 243a
of the Unternehmensgesetzbuch (Austrian
Commercial Code)
1.
The capital stock amounts to EUR 327,272,727
and is divided into 327,272,727 bearer shares
of no par value. There is only one class of
shares.
2. There is a consortium agreement in place
between the two core shareholders, Öster-
reichische Beteiligungs AG (ÖBAG) and
Mubadala Petroleum and Petrochemicals
Holding Company L.L.C (MPPH), which pro-
vides for coordinated behavior and certain
limitations on transfers of shareholdings.
consent of the Supervisory Board – at once
or in several tranches – by an amount of up to
EUR 32,727,272 by issuing up to 32,727,272
new no-par value common voting shares in
bearer form in return for contributions in cash.
The capital increase can also be implemented
by way of indirect offer for subscription after
taking over by one or several credit institutions
according to Section 153 Paragraph 6 Stock
Corporation Act. The issue price and the condi-
tions of issuance can be determined by the
Executive Board with the consent of the Super-
visory Board. The Annual General Meeting
also authorized the Executive Board, subject
to the approval of the Supervisory Board,
to exclude the subscription right of the share-
holders if the capital increase serves to
3. ÖBAG holds 31.5% and MPPH holds 24.9%
(i) adjust fractional amounts or
of the capital stock.
4. All shares have the same control rights.
5. Employees who are shareholders directly
exercise their voting rights at the Annual
General Meeting.
6. The Company’s Executive Board must consist
of two to six members. The Company’s Super-
visory Board must consist of at least six mem-
bers elected by the Annual General Meeting
and of the members nominated under section
110 (1) of the Arbeitsverfassungsgesetz (Aus-
trian Labor Constitution Act). Resolutions con-
cerning the dismissal of members of the Super-
visory Board pursuant to section 87 (8) of the
Aktiengesetz (Austrian Stock Corporation Act)
require a simple majority of the votes cast.
To approve capital increases pursuant to sec-
tion 149 of the Austrian Stock Corporation
Act and alterations of the Articles of Associa-
tion (except those concerning the Company’s
objects), simple majorities of the votes and
capital represented in adopting the resolution
are sufficient.
7. a) As the authorized capital granted by the
Annual General Meeting on May 13, 2009
expired on May 13, 2014, the Annual General
Meeting decided upon a new authorized
capital on May 14, 2014. Specifically, it autho-
rized the Executive Board until May 14, 2019
to increase the share capital of OMV with the
(ii) satisfy stock options or long term incentive
plans (including matching share plans for
employees, senior employees and members
of the Executive Board/management boards
of the Company or one of its affiliates), or
other employees’ stock ownership plans.
In addition, the Supervisory Board was autho-
rized to adopt amendments to the Articles
of Association resulting from the issuance of
shares according to the authorized capital.
b) On May 18, 2016, the Annual General Meeting
authorized the Executive Board for a period of
five years from the adoption of the resolution,
therefore, until (and including) May 17, 2021,
upon approval of the Supervisory Board, to dis-
pose of or utilize stock repurchased or already
held by the Company to grant treasury shares
to employees, senior employees and/or mem-
bers of the Executive Board/management
boards of the Company or one of its affiliates,
including for purposes of share transfer pro-
grams – in particular, long-term incentive plans
including matching share plans or other stock
ownership plans – under exclusion of the gen-
eral purchasing possibility of shareholders
(exclusion of subscription rights). The authori-
zation can be exercised as a whole or in parts
or even in several tranches by the Company, by
a subsidiary (section 189a, number 7, of the
Austrian Commercial Code) or by third parties
for the account of the Company.
80
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
8. a) The EUR 750 mn hybrid bond, which was issued
in 2011, was called and redeemed at its nominal
value plus interest on April 26, 2018, the first
possible call date.
b) OMV has issued perpetual hybrid notes the
amount of EUR 1,987 mn which are subor-
dinated to all other creditors. According to
IFRS, the proceeds of the hybrid notes are
fully treated as equity because the repayment
of the principal and the payments of interest
are solely at the discretion of OMV.
On December 7, 2015, OMV issued hybrid
notes with an aggregate size of EUR 1,500 mn,
in two tranches of EUR 750 mn each with the
following interest payable:
(i) The hybrid notes of tranche 1 bear a fixed in-
terest rate of 5.250% until, but excluding,
December 9, 2021, which is the first call date
of tranche 1. From December 9, 2021, until,
but excluding, December 9, 2025, hybrid notes
of tranche 1 will bear interest according to a
reset interest rate to be determined according
to the relevant five-year swap rate and an
additional margin of 4.942% and, from Decem-
ber 9, 2025, with an additional step-up of 1%
per annum.
(ii) The hybrid notes of tranche 2 bear a fixed in-
terest rate of 6.250% until, but excluding,
December 9, 2025, which is the first call date
of tranche 2. From December 9, 2025, tranche 2
will bear interest according to a reset interest
rate to be determined according to the relevant
five-year swap rate and an additional margin
of 5.409%, with an additional step-up of 1%
per annum
Interest is due and payable annually in arrears
on December 9 of each year, unless OMV
elects to defer the relevant interest payments.
The outstanding deferred interest must be paid
under certain circumstances, in particular, if
the General Meeting of OMV resolves upon a
dividend payment on OMV shares.
On June 19, 2018 OMV issued a hybrid bond
with a size of EUR 500 mn. The hybrid bears
a fixed interest rate of 2.875% until, but ex-
cluding, June 19, 2024. From June 19, 2024
until, but excluding, June 19, 2028 the hybrid
notes will bear interest at a rate according to
the relevant five-year swap rate and an addi-
tional margin of 2.335% per annum and, from
June 19, 2028, with an additional step-up
of 1% per annum. Interest is due and payable
annually in arrears on June 19 of each year,
unless OMV elects to defer the relevant inter-
est payments. The outstanding deferred interest
must be paid under certain circumstances,
in particular, if the General Meeting of OMV
resolves upon a dividend payment on OMV
shares.
The hybrid notes outstanding as of Decem -
ber 31, 2018 do not have a scheduled maturity
date and they may be redeemed at the option
of OMV under certain circumstances. OMV
has, in particular, the right to repay the hybrid
notes at certain call dates. Any accrued unpaid
interest becomes payable when the bond is
redeemed. In the case of a change of control,
OMV may call the hybrid notes for redemption
or else the applicable interest rate will be
subject to an increase according to the terms
and conditions of the hybrid notes.
9. The material financing agreements to which
OMV is a party and bonds issued by OMV
contain typical change of control clauses.
10. There are no agreements between the Com-
pany and members of the Executive Board and
Supervisory Board or employees regarding
the payment of compensation in the event of a
public takeover bid.
11. The most important elements of the internal
control and risk management system regarding
the accounting process are the following:
Governance for the internal control system
is defined by internal corporate regulations
(ICS Directive and its Annexes). Corporate
Internal Audit controls the compliance with
these principles and requirements through
regular audits, based on the annual audit plan
approved by the Audit Committee of the
Supervisory Board, or through ad hoc audits.
81
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT
The results of those audits are presented to
the Audit Committee of the Supervisory Board.
For the main “end-to-end” processes (e.g.
purchase-to-pay, order-to-cash), Group-wide
Minimum Control Requirements are defined.
Based on a defined time plan, the implementa-
tion and the effectiveness are being monitored.
The establishment of Group-wide standards
for the preparation of annual and interim finan-
cial statements by means of the corporate
IFRS Accounting Manual is also regulated by
an internal corporate regulation. The Group
uses a comprehensive risk management sys-
tem. The essential processes of the financial
reporting system have been identified and ana-
lyzed. In addition, the effectiveness of the risk
management system is regularly evaluated by
external auditors. The results of the evaluation
are reported to the Audit Committee of the
Supervisory Board.
12. In accordance with section 267a (6) of the
Commercial Code, a separate consolidated
non-financial report will be issued.
Subsequent events
Please refer to Note 37 in the Consolidated Financial
Statements.
Vienna, March 13, 2019
The Executive Board
Rainer Seele m.p.
Johann Pleininger m.p.
Reinhard Florey m.p.
Manfred Leitner m.p.
82
OMV ANNUAL REPORT 2018 / DIRECTORS’ REPORT 3CONSOLIDATED CORPORATE
GOVERNANCE REPORT
83 – 102
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Consolidated Corporate Governance Report
OMV, as a publicly listed company with its headquarters in Austria, is dedicated to the principles of
sound corporate governance and has always sought to comply with best practice in corporate
governance to ensure responsible management and control of the OMV Group, a high level of trans-
parency for every stakeholder and, ultimately, the sustainable and long-term creation of value.
Austrian law, the Articles of Association, the Inter-
nal Rules for the corporate bodies and the Austrian
Code of Corporate Governance (ACCG) provide the
core legal framework for OMV’s corporate gover-
nance. OMV adheres to the ACCG issued by the
Austrian Working Group for Corporate Governance.
The code is publicly accessible at www.corporate-
governance.at. OMV’s compliance with the ACCG
in 2018 was evaluated externally by independent
advisors. The report on the evaluation is available at
www.omv.com and confirms that OMV conformed
to all of the compulsory “comply or explain” rules
(the “C-rules”) and also all of the recommended
rules (the “R-rules”). As for C-rules 27 and 28, expla-
nations concerning the variable remuneration
plans are provided in the remuneration report.
For OMV Petrom SA, a company consolidated in
the OMV Group and the shares of which are pub-
licly listed on the Bucharest Stock Exchange as well
as on the London Stock Exchange, the relevant
Cor porate Governance Report can be found at
www.omvpetrom.com/en/about-us/corporate-
governance-aboutus.
Executive Board
Rainer Seele, * 1960
Date of initial appointment: July 1, 2015
End of the current period of tenure: June 30, 2020
Chairman of the Executive Board and Chief
Executive Officer
Responsible for the overall management and
coordination of the Group
Rainer Seele received his PhD in chemistry at the
University of Göttingen and subsequently had
senior appointments at the BASF Group where in
2000 he first became a member of the executive
board and then later chairman of the executive
board at WINGas GmbH. From 2009 until 2015, he
was chairman of the board of directors of Winters-
hall Holding GmbH.
Functions in major subsidiaries of the OMV Group
Company
OMV Petrom SA
Borealis AG
OMV Exploration &
Production GmbH
OMV Refining &
Marketing GmbH
OMV Gas & Power
GmbH
Function
President of the Supervisory
Board
Deputy Chairman of the
Supervisory Board
Chairman of the Supervisory
Board
(until September 30, 2018)
Chairman of the Supervisory
Board
(until September 30, 2018)
Chairman of the Supervisory
Board
(until September 30, 2018)
OMV Solutions GmbH Chairman of the Supervisory
Board
(until January 31, 2018)
84
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Johann Pleininger, * 1962
Date of initial appointment: September 1, 2015
End of the current period of tenure: August 31,
2020
Deputy Chairman of the Executive Board
Reinhard Florey, * 1965
Date of initial appointment: July 1, 2016
End of the current period of tenure: June 30, 2021
Chief Financial Officer
Responsible for Finance
Responsible for the Business Segment Upstream
Johann Pleininger started his professional career
at OMV in 1977 and later studied mechanical and
economic engineering. During his time at OMV, he
held various senior positions. From 2007 to 2013,
he was an Executive Board member of OMV Petrom
in Bucharest, responsible for Exploration & Produc-
tion. Prior to his appointment as Executive Board
member of OMV, he was the Senior Vice President
responsible for the Upstream countries Romania
and Austria as well as for the development of the
Black Sea region.
Reinhard Florey graduated with a degree in me-
chanical engineering and economics from the Graz
University of Technology while also completing
his music studies at the University of Fine Arts. He
started his career in corporate consulting and
strategy consulting. From 2002 to 2012, he worked
in different positions worldwide for Thyssen Krupp
AG. Until June 2016, he was CFO and Deputy CEO
of Outokumpu Oyj.
Member of the Supervisory Boards of Wiener
Börse AG and CEESEG Aktiengesellschaft
Member of the Supervisory Board of FK Austria
Wien AG
Functions in major subsidiaries of the OMV Group
Company
OMV Petrom SA
Function
Member of the
Supervisory Board
President of the
OMV Petrom Global
Supervisory Board
Solutions SRL
Deputy Chairman of the
Central European Gas
Hub AG
Supervisory Board
OMV Solutions GmbH Managing Director
OMV Exploration &
Production GmbH
OMV Gas &
Power GmbH
OMV Refining &
Marketing GmbH
(until January 31, 2018)
Deputy Chairman of the
Supervisory Board
(until September 30, 2018)
Deputy Chairman of the
Supervisory Board
(until September 30, 2018)
Deputy Chairman of the
Supervisory Board
(until September 30, 2018)
Functions in major subsidiaries of the OMV Group
Company
OMV Petrom SA
OMV Petrom Global
Solutions SRL
Function
Member of the Supervisory
Board
(until April 26, 2018)
Member of the Supervisory
Board
(until September 1, 2018)
OMV Petrom Gas SRL Member of the
OMV Exploration &
Production GmbH
OMV Austria
Exploration & Produc-
tion GmbH
OMV Gas &
Power GmbH
OMV Refining &
Marketing GmbH
Supervisory Board
Managing Director
Chairman of the Supervisory
Board
Deputy Chairman of the
Supervisory Board
(until September 30, 2018)
Deputy Chairman of
the Supervisory Board
(until September 30, 2018)
OMV Solutions GmbH Member of the
Supervisory Board
(until January 31, 2018)
85
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Manfred Leitner, * 1960
Date of initial appointment: April 1, 2011
End of the current period of tenure: December 31,
2019
Responsible for the Business Segment Down-
stream and the OMV Group’s plastic and chemical
interests
After receiving a degree in commerce from the
Vienna University of Economics and Business
Administration, Manfred Leitner joined OMV in
1985. After working for two years in the Finance
Department of the Exploration & Production busi-
ness unit, he became Head of Finance at OMV’s
branch in Tripoli, Libya. Following his return to
Austria, he was in charge of the Controlling Depart-
ment within Exploration & Production until 1997.
He then moved to the Refining & Marketing Busi-
ness Segment, where he led the Planning and
Controlling Department until 2002. He was Senior
Vice President for Downstream Optimization &
Supply from 2003 until 2011.
Functions in major subsidiaries of the OMV Group
Company
OMV Petrom SA
Borealis AG
OMV Supply & Trading
Limited
OMV Gas & Power
GmbH
OMV Refining &
Marketing GmbH
OMV Exploration &
Production GmbH
Function
Member of the Supervisory
Board
Member of the Supervisory
Board
Chairman of the Supervisory
Board
Managing Director
Managing Director
Deputy Chairman of the
Supervisory Board
(until September 30, 2018)
OMV Solutions GmbH Deputy Chairman of the
Central European Gas
Hub AG
GAS CONNECT
AUSTRIA GmbH
OMV Gas Storage
GmbH
OMV Samsun Elektrik
Üretim Sanayi ve
Ticaret A.S.
OMV Gaz Iletim A.S.
OMV Enerji
Ticaret A.S.
Supervisory Board
(until January 31, 2018)
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Supervisory Board
Chairman of the
Board of Directors
(until September 6, 2018)
Chairman of the
Board of Directors
Chairman of the
Board of Directors
Working practices of the Executive Board
The approval requirements, responsibilities of indi-
vidual Executive Board members, decision-making
procedures and the approach to conflicts of inter-
est are governed by the Internal Rules of the Exec-
utive Board. The Executive Board holds at least
bi-weekly meetings to exchange information and
take decisions on all matters requiring plenary
approval.
Remuneration report
The remuneration report gives an overview of the
remuneration packages provided for Executive
Board members. It outlines remuneration principles
and explains compensation elements. OMV differ-
entiates between fixed and variable compensation
elements but also between monetary and non-
monetary components.
86
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Executive Board remuneration policy
Compensation
Element
Base Salary
Benefits
Retirement
Benefits
Annual Bonus
Long Term
Incentive Plan
Description
Purpose & Link to Strategy
Shareholder Alignment
Salary levels take into ac-
count the responsibilities and
performance of each member
of the Executive Board, the
situation of OMV, and com-
mon levels of remuneration
in European Oil & Gas com-
panies of comparable size as
well as comparable Austrian
companies. Compensation is
set at a competitive level.
Executive Board members
receive a company car and
are eligible for accident in-
surance. No additional health
coverage aside from the Aus-
trian public health system.
Provide a fixed level of earn-
ings reflecting the scale and
complexity of the business and
the roles and responsibilities of
each Executive Board member,
ensuring competitiveness with
the market.
Competitive compensation to
attract, retain and motivate
the most qualified Oil & Gas
managers to lead the compa-
ny in the shareholders’ best
interest.
Provide benefits comparable
to those for OMV employees to
attract and retain Executive
Board members.
Part of a competitive compen-
sation package to attract and
retain the most qualified Exec-
utive Board members.
Defined contribution pension
schemes are granted using a
pension fund. Available capi-
tal in the pension fund deter-
mines the level of pension.
Retirement age is the Austri-
an statutory retirement age.
Retirement benefits are in line
with those offered to OMV em-
ployees, ensuring that compen-
sation packages are aligned
with common market practice
in Austria and in the Oil & Gas
industry.
Provide variable compensation
based on annual financial and
non-financial performance cri-
teria that are relevant to OMV’s
strategy and the Oil & Gas in-
dustry. Performance is mea-
sured against financial targets
and sustainability criteria, in-
cluding health, safety, security
and environment. They are de-
termined by the Supervisory
Board and the Remuneration
Committee respectively.
Promote mid-and long-term
value creation at OMV. Perfor-
mance is measured against key
criteria linked to OMV’s strategy
and shareholder return.
Performance is measured
based on annual criteria. 2/3
of the Annual Bonus is paid
in cash and 1/3 is allocated
in shares and deferred to be
held for three years after
vesting. Award is defined as
a Target Annual Bonus in eu-
ros, stated in the Executive
Board service contracts and
capped at 180% (150% +/–
20% sustainability multiplier).
A Performance Share Plan is
employed. The number of
shares that vest depends on
the achievement of a finan-
cial performance criterion
as well as the relative Total
Share holder Return. The
number of shares awarded is
capped at 200% of the Target
Long-Term Incentive in euros,
stated in the Executive Board
service contracts. The Super-
visory Board has the dis cre-
tion to adjust the overall
target achievement through a
Health, Safety, Security or
Environmental (HSSE)-Malus.
A pension fund is used to limit
the risks borne by OMV. Pen-
sion benefits depend solely on
the available capital in the
pension fund. Any annuitization
into a life-long pension is made
in accordance with the pension
fund’s approved business plan.
Performance criteria are in line
with OMV’s strategy, ensure
pay for performance and foster
an equity culture. Details on
the performance criteria are
reported in the Annual Report.
Grants are subject to clawback
provisions.
Align interests of Executive
Board and shareholders, en-
sure pay for performance and
foster an equity culture by
granting OMV shares subject
to performance criteria focus-
ing on financial performance
(weighting: 50%) and increase
in value compared to other
European Oil & Gas compa-
nies (weighting: 50%). Details
on the criteria are reported in
the Annual Report. Grants are
subject to malus and clawback
provisions.
87
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Executive Board remuneration policy
Compensation
Element
Shareholding
requirements
Payout cap
Description
Purpose & Link to Strategy
Shareholder Alignment
Shares equal to 200% of the
Base Salary for the CEO,
175% for the Deputy CEO and
150% for other Executive
Board members, which must
be accumulated within five
years after the respective ini-
tial appointment as Executive
Board member.
In addition to the caps defined
for the Annual Bonus and the
Long Term Incentive Plan a
cap for total annual compen-
sation is applied for each
Executive Board member.
Provide long-term alignment
of interests by putting Execu-
tive Board members’ personal
assets at stake.
Absolute caps to avoid not in-
tended remuneration levels and
to limit the risk borne by OMV.
Alignment of interests by turn-
ing the Executive Board into
shareholders. Potential impact
on Executive Board members’
personal assets creates an ef-
fect comparable to malus and
clawback.
Align interests of Executive
Board and shareholders by pro-
moting a sustainable and long-
term development of the com-
pany and preventing inappro-
priate risk-taking.
The Executive Board members of OMV are em-
ployed under local Austrian terms and conditions,
the salaries are therefore expressed in euros (gross).
Their employment contracts are concluded with
OMV Aktiengesellschaft and governed by Austrian
law.
The remuneration of OMV’s Executive Board mem-
bers is aimed to be at competitive levels and
includes a strong performance-related component.
Competitive pay levels are ensured through regular
external benchmarking against peer groups, such
as European Oil & Gas companies and relevant
Austrian industrial companies.
Long-term shareholder and stakeholder interests
are reflected in performance-related remuneration,
which includes both long- and short-term elements.
The Executive Board’s performance is assessed
against financial and non-financial criteria. Specific
projects related to the implementation of OMV’s
strategy are also taken into account.
Pursuant to C-rules 27 and 28 of the ACCG, measur-
able performance criteria are defined in advance for
the variable remuneration components. Given the
industry-inherent volatility of commodity prices
and market conditions, political country risks as
well as an increased safety exposure, the variable
remuneration plans give the Supervisory Board
and the Remuneration Committee, respectively, in
line with the general practice in the Oil & Gas
industry, certain room for adjustments to amend
certain components in case of significant changes
of major external factors (e.g. oil price) as well as
to determine the achievement of certain criteria.
Any adjustments are always in line with relevant
factors and within disclosed maximum limits.
Structure of Executive Board Remuneration
The Executive Board remuneration consists of fixed
and variable compensation elements as well as
benefits. Each Executive Board member receives a
remuneration package comprising of Base Salary,
an Annual Bonus (a portion of which is deferred for
three years and paid out in OMV shares), a Long
Term Incentive Plan (LTIP), pension contributions
and non-cash benefits.
The majority of Executive Board members’ target
compensation is granted in the form of variable
compensation elements. For the financial year 2018,
variable elements comprised between 67% and
73% of Executive Board members’ target compen-
sation (variance is due to higher target LTIP level
for the Chairman). In line with Austrian law and
requirements set forth by the ACCG, a majority of
variable compensation is based on multiyear
performance. For the financial year 2018, between
88
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Overview of the Executive Board's compensation
Remuneration Component
Share of Total Target Remuneration
Performance
related
remuneration
Non-performance
related
remuneration
In %
Long Term Incentive
Plan (LTIP)
Annual Bonus
(Equity Deferral)
Annual Bonus
(Cash Bonus)
Base
salary
49
24
27
37
30
33
35
32
33
Non-cash
benefits
Pension
contributions
Chairman
Deputy
Chairman
Board
Members
52% and 67% of the target variable compensation
is oriented towards long-term performance, either
through the LTIP or the deferred portion of the
Annual Bonus (Equity Deferral).
Non-performance-related remuneration
Base salary
The fixed base remuneration of Executive Board
members is paid monthly as a salary. The employ-
ment contracts stipulate the fixed remuneration to
be paid in 14 payments.
Non-cash benefits
Executive Board members receive a company car
and are eligible for an accident insurance. Health
coverage is provided under the Austrian public
social insurance system.
Pension contributions
All members of the Executive Board are entitled to
defined contribution pension payments, thus limit-
ing the risks borne by OMV. The Company pays the
contributions into a pension fund (APK-Pensions-
kasse AG). The actual amount of the company pen-
sion depends on the amount of available capital
in the pension fund. The annuitization is made in
accordance with the pension fund’s approved
business plan. The retirement age for all Executive
Board members is the Austrian statutory retire-
ment age.
Performance-related remuneration
Annual bonus
The Annual Bonus rewards financial performance,
operational excellence and sustainable corporate
development at OMV. For each financial year, the
Supervisory Board defines a set of performance
criteria. At maximum, the payout can amount to
180% (150% +/-20% sustainability multiplier) of the
Target Annual Bonus stated in the Executive Board
service contracts.
The actual amount depends on the achievement of
financial and operational targets. Additionally, the
sustainability multiplier can be applied to the over-
all performance at the Supervisory Board’s discre-
tion based on a predefined set of criteria. In case of
major changes in external factors (e.g. oil price)
the Supervisory Board can adjust the target levels
of the performance criteria. Performance criteria
applied in the financial year 2018 are described in
detail below.
The payout of the Annual Bonus is split between a
Cash Bonus (2/3), which is paid in the following
financial year, and an Equity Deferral 1 (1/3), which
is awarded in OMV shares to be held for a period
of three years (holding period). The shares are
awarded net of taxes in the following financial year
and are to be transferred to a trustee deposit man-
aged by OMV, for the duration of the holding period.
The Equity Deferral serves – in addition to LTIP –
as a long-term compensation instrument for the
members of the Executive Board, promoting reten-
tion and shareholder alignment at OMV.
1 Until 2016 “Matching Share Plan” (MSP) and in 2017 “Share Part of the Annual Bonus”
89
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Modifiers
Sustainability
multiplier (0.8 -1.2)
=
Cash Bonus
(2/3)
Financial targets
modifier
Equity Deferral
(1/3)
T
a
r
g
e
t
A
n
n
u
a
l
B
o
n
u
s
M
a
x
.
1
8
0
%
o
f
The actual Annual Bonus amount depends on the
level of vesting of each performance criterion,
which is determined by comparing achieved results
against defined targets and expressed as a per-
centage. The sum of achievements results in the
overall target achievement. The actual achieve-
ments are validated by Ernst & Young Wirtschafts-
prüfungsgesellschaft m.b.H. Vesting occurs on a
straight-line basis between the performance levels.
Level of vesting
Criteria
All criteria
Performance
Maximum
Target
Threshold
Below threshold
Vesting
150%
100%
50%
0%
The Target Annual Bonus amount for each Execu-
tive Board member is defined as follows assuming
vesting levels of 100%:
Weighting
40%
40%
20%
+/– 20%
multiplier/
discre-
tionary
Target variable remuneration – Annual Bonus 2018
In EUR
discre-
tionary
Seele Pleininger
Florey Leitner
Cash Bonus
Equity Deferral
1,000,000
500,000
700,000 675,000 675,000
337,500
350,000 337,500
Annual Bonus 2018
Target
Annual Bonus X
Financial and
operational target
achievement
X
Performance criteria are agreed at the outset of
the performance year and then assessed after the
close of that year. The performance criteria for
the financial year 2018 comprise of the areas and
adjustments set out in the table below.
Performance criteria – 2018 Annual Bonus
(Cash Bonus and Equity Deferral)
Area
Financial
Operational
Sustainability
Multiplier
Adjustment
of financial
targets
Criteria
Reported Net Income
Clean CCS ROACE 3-year
(2016-2018) Ø
NPV assessment of ongoing
large investments including
acquisitions based on annu-
al change
Value between 0.8 and 1.2
determined at discretion of
the OMV Supervisory Board
based on a predefined set
of criteria applicable to the
overall target achievement
In case of major changes
in external factors (e.g. oil
price) the OMV Supervisory
Board has the discretion
to adjust the target levels of
the performance criteria
90
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
The actual achievements in 2018 result in a Total
Actual Annual Bonus equal to 124.6% of the Target
Annual Bonus. The Cash Bonus component, 2/3
of the total, is to be paid in 2019. Under the Equity
Deferral, the remaining 1/3 to be awarded in the
form of OMV shares and deferred for a period of
three years.
Performance scorecard – 2018 Annual Bonus (Cash Bonus and Equity Deferral)
Criteria
Reported Net Income
Clean CCS ROACE
3-year Ø
Operational target
Target achievement
before financial tar-
gets modifier and
sustainability multi-
plier
Target achievement
after financial targets
modifier
Sustainability
multiplier
Total vesting
percentage
in EUR mn
Threshold
1,560
Target Maximum
2,110
1,835
Actual Weighting
40%
2,233
Vesting
(% of target
Value)
60%
in EUR mn
10.2%
Decrease of
non-market
NPV by
EUR (50) mn
from baseline
10.7%
No change
of non-
market
NPV from
baseline
(EUR 11 mn)
11.2%
Increase of
non-market
NPV by
EUR +50 mn
from the
baseline
11.7%
40%
60%
(124)
20%
0%
0.8
1
1.2
1.1
120%
113.2%
1.1
124.6%
The targets for Reported Net Income and 3-year
average Clean CCS ROACE were achieved in the
financial year 2018. The operational target, i.e. the
NPV assessment of selected large investment pro-
jects, was below threshold level. Taking into account
substantial improvement in the market environ-
ment as compared to the assumptions on which the
Annual Bonus was based, the Super visory Board
made use of its discretionary power and raised the
target levels related to the financial target modifier,
thereby adjusting the target achievement from
120% to 124.6%. A predefined set of criteria was
used by the Supervisory Board in making its dis-
cretionary decision with respect to the sustain-
ability multi plier. In particular, improvements in
environment, safety and sustainability as well as
the number of fatalities were taken into consider-
ation in amending the target achievement related
to the sustainability multiplier by 1.1.
Long Term Incentive Plan
The Long Term Incentive Plan (LTIP) is a long-term
compensation instrument for members of the
Executive Board that promotes mid- and long-term
value creation at OMV. The plan seeks to align the
interests of management and shareholders by
granting OMV shares to management, subject to
performance against key performance criteria
linked to the medium-term strategy and shareholder
return. The plan also seeks to prevent inappro-
priate risk-taking. The grant is defined as a Target
Long-Term Incentive, stated in the Executive Board
service contracts.
Executive Board members have received an annual
grant since the plan’s introduction in 2009. The LTIP
2018 was approved by the Annual General Meeting
2018.
91
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Long Term Incentive Plan (LTIP) 2018
LTIP
grant value
Ø Share
price
January 1, 2018 –
March 31, 2018
=
Share price development
FY 2018
FY 2019
FY 2020
Granted no. of
share equivalents
Performance period
Performance criteria
Ø Share
price
January 1, 2021 –
March 31, 2021
X
Final no.
of shares
=
Payout
in cash
Final no.
of shares
=
Payout
in shares
or
or
Performance criteria are agreed at the beginning
of the three-year performance period and assessed
after the close of this period. Weightings for the
respective criteria are also established at the outset
of the performance period. For the LTIP 2018 (per-
formance period: January 1, 2018, until December
31, 2020), the following performance criteria apply:
the LTIP payout and, depending on the extent of
the infraction, reduce it at its reasonable discretion,
if necessary to zero.
The LTIP 2018 vests on March 31, 2021. The vesting
levels for each of the performance criteria are
shown in the table below.
Performance criteria – LTIP 2018
Criteria
Relative Total Shareholder Return (TSR)
Free cash flow before dividends and excl.
Divestments and Acquisitions 3-year Ø
Weighting
50%
50%
Relative TSR is measured against a well-balanced
Upstream/Downstream peer group of twelve Oil &
Gas companies (Shell, BP, Total, Eni, Equinor, Lundin
Petroleum, Repsol, Galp Energia, MOL, Tupras,
Neste Oil and PKN Orlen).
The actual LTIP amount depends on the level of
vesting of each performance criterion, which is
determined by comparing achieved results against
defined targets and expressed as a percentage. The
sum of achievements results in the overall target
achievement. The actual achievements are validated
by Ernst & Young Wirtschaftsprüfungsgesellschaft
m.b.H. Payments will vest on a straight-line basis
between the performance levels/quartiles.
A Health, Safety, Security or Environmental (HSSE)
malus may be applied to the overall target achieve-
ment. In situations where a severe health, safety
and security or environmental breach has occurred,
the Supervisory Board can re-examine the level of
Level of vesting
Criteria
Free cash flow before
dividends and excl.
Divestments and
Acquisitions 3-year Ø
Relative TSR
Performance
Vesting
Maximum
Target
Threshold
Below threshold
Maximum: at or
above 3rd quartile
(≥75th percentile)
Target: at median
(=50th percentile)
Threshold: at or
below 1st quartile
(≤25th percentile)
200%
100%
50%
0%
200%
100%
0%
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
The Target LTI amount for each Executive Board
member is defined as follows and will be paid out
assuming vesting levels of 100%:
Target variable remuneration – LTIP 2018
In EUR
LTIP 2018
1,500,000
500,000 387,500 387,500
Seele Pleininger
Florey Leitner
The total vesting percentage for the LTIP 2016 is
92.6% of the maximum grant, and the correspond-
ing transfer of shares or cash payment will be
made in 2019. The actual achievements are re-
viewed by an independent expert.
Note 32 provides additional information on the
Long Term Incentive Plan and the Equity Deferral
(MSP).
Performance scorecard – LTIP 2016
Actual Weighting
Vesting
(% of max.
grant value)
Criteria
Relative TSR vs. peers
FCF after dividends excl.
divestments 3-year Ø
Action Item Response Rate
3-year Ø: Incidents & Near
Misses
Action Item Response Rate
3-year Ø: Findings & Hazards
Contractor Management
3-year Ø
Performance of divestments
& acquisitions
Total vesting percentage
Threshold
Target
at or below
1st quartile
(≤25th
percentile)
–300
Ø p.a.
at median
(=50th
percentile)
200
Ø p.a.
Stretch
at or
above 3rd
quartile
(≥75th
percentile)
500
Ø p.a.
in
EUR mn
at or
above 3rd
quartile
(218)
Ø p.a.
89%
86%
93%
90%
97%
94%
≥ 75%
> 85%
> 95%
Based on pre-defined criteria,
in particularly value generation
for the company
96%
94%
92%
10%
70%
10%
2.5%
2.5%
5%
70%
3.2%
2.3%
2.5%
4.6%
10%
100%
10%
92.6%
Shareholding requirements for members
of the Executive Board
Executive Board members are required to accumu-
late an appropriate shareholding in OMV and hold
these shares until retirement or departure from the
Company. The shareholding requirement is defined
as a percentage of the annual gross base salary:
200% for the Chairman of the Executive Board,
175% for the Deputy Chairman of the Executive
Board and 150% for other Executive Board mem-
bers. The shareholding must be accumulated and
achieved within five years after the respective ini-
tial appointment as an Executive Board member.
All Executive Board members have already fulfilled
at least a part of their shareholding requirement.
To the extent the shareholding requirement is not
fulfilled, payments from the LTIP will be automati-
cally made in the form of shares (net after tax de-
duction). If the shareholding requirement is already
fulfilled, the payout can be made either in cash or
shares. The base for the calculation of the respec-
tive number of shares is the average closing price
on the Vienna Stock Exchange of the OMV share
over the three-month period from January 1, 2018,
to March 31, 2018 (EUR 50.02).
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Shareholding requirement and fulfillment
Shareholding
requirement
Fulfillment
In shares
As %
salary
In shares 1
Seele
Pleininger
Florey
Leitner
91,974
47,032
43,897
43,897
200
175 2
150
150
70,890
28,511
13,401
65,245
As %
require-
ment
77.08
60.62
30.53
148.63
1 On Company trustee deposits
2 The stated shareholing requirement results from the LTIP 2016, when
Mr. Pleininger still had an obligation of 150% of his gross annual salary;
since his appointment as Deputy CEO, a shareholding requirement of
175% applies.
Clawback
Both the Equity Deferral and the LTIP are subject to
clawback regulations that, under certain circum-
stances, allow the adjustment of outstanding com-
pensation and/or the reclaim of compensation
already paid out. In case of a clawback event, cash
or company shares granted under Equity Deferral
or LTIP will be reduced or may be clawed back
upon request from the Supervisory Board. The fol-
lowing reasons are considered clawback events:
adjustment of approved financial statements due to
a mistake, material failure of risk management that
leads to significant damages as well as serious
misconduct of individual Executive Board members
that violates Austrian law. Furthermore, in case
any payout in cash or transfer of shares is based on
incorrect data, the amounts will be corrected and
claimed back accordingly.
Remuneration levels in 2018
Executive Board remuneration 1
In EUR
Remuneration 2018
Fixed (base salary)
Variable (Cash Bonus 2017)
Benefits in kind (company car, accident
insurance and reimbursed expenses)
Total
Variable (Equity Deferral 2017;
in shares)3
Fixed/variable ratio 4
LTIP 2015 (cash) 5
LTIP 2015 (in shares) 5
Seele
1,100,000
900,000
Pleininger
750,000
575,000
Florey
700,000
600,000
Leitner
700,000
700,000
Total
3,250,000
2,775,000
13,025
2,013,025
12,665
1,337,665
51,190 2
1,351,190
12,544
1,412,544
89,424
6,114,424
16,888
26/74
0
33,014
10,790
33/67
0
9,607
11,259
40/60
0
0
13,135
19/81
1,724,101
0
52,072
27/73
1,724,101
42,621
1 There are discrepancies between individual items and totals due to rounding differences. The variable components relate to target achievement in 2017,
for which variable compensation was paid in 2018
2 Including schooling costs, moving costs and related taxes
3 The “Share part of the Annual Bonus” was renamed to Equity Deferral at the grant date
4 Split of total compensation. Fixed includes base salary and benefits in kind; variable includes Cash Bonus, Equity Deferral (“Share Part of the Annual
Bonus”) and LTIP 2015
5 LTIP payout in cash or shares depending on fulfillment of shareholding requirement:
Rainer Seele received pro-rated payout in shares for LTIP 2015 as he joined the Executive Board effectively July 1, 2015
Johann Pleininger received pro-rated payout in shares and in addition cash payment amounting to EUR 0.52 mn based on the Senior Manager LTIP 2015
Since the gradual appointment of new members
to the Executive Board, OMV has seen remarkable
performance. With a share price increase of 52%
between July 2015 and December 2018, OMV has
substantially outperformed relevant benchmarks
such as the FTSEurofirst E300 Oil & Gas (2% in-
crease). Furthermore, the Executive Board rigor-
ously pursues a growth strategy to strengthen
OMV’s competitiveness and earning power. To
reward the Executive Board’s performance and
incentivize it further, the Remuneration Committee
revisited the level of each Executive Board mem-
ber’s remuneration package and benchmarked it
against a relevant European Oil & Gas peer group.
The Executive Board members’ performance, their
roles and responsibilities as well as the overall
situation of the Company were taken into account.
Based on this analysis and considering retention
risk and the re-design of the compensation system
to include an overall compensation cap, the salary
of selected Executive Board members was increased
to competitive market levels. As in the past, salaries
are not subject to automatic consumer price infla-
tion increases but instead will be reviewed on an
annual basis together with the performance of the
Executive Board members.
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Pension fund contributions
In EUR
Seele
Pleininger
Florey
Leitner
Total
Indemnity
The Executive Board and officers of direct and
indirect subsidiaries of OMV Aktiengesellschaft, to
the extent legally possible, are also indemnified
against claims by third parties with respect to their
actions exercised within the scope of their duties,
except in cases of willful intent or gross negligence.
275,000
187,500
175,000
175,000
812,500
Based on their former employment contracts as
Executive Board members, Gerhard Roiss, David
C. Davies, Hans-Peter Floren and Jaap Huijskes
received payments in 2018. David C. Davies received
bonus and LTIP payments in 2018. Jaap Huijskes,
Gerhard Roiss and Hans-Peter Floren received LTIP
payments in 2018.
Payments to former Executive Board members
In EUR
Remuneration
entitlements
for 2018 (bonus
and LTIP) 1
Payments for
contractual
obligations 2
Total
Davies Huijskes
Roiss
Floren
2,735,317 1,776,177 3,300,387 1,477,774
0
0
2,735,317 1,776,177 3,300,387 1,477,774
0
0
1 Cash Bonus and Equity Deferral (MSP) related to target achievement in
2017 and LTIP related to target achievement in 2015–2017
2 Base salary and benefits in kind
In accordance with C-rule 27a of the ACCG, the
employment contracts with members of the Exe c-
utive Board provide that settlement payments in
the event of premature termination of such contracts
without a material breach shall not exceed the
amount set forth in the ACCG (maximum of two
years annual pay). For contracts concluded after
July 2015, settlement payments in the event of
termination within the contract period have been
reduced to 18 months’ pay and have been limited
to fixed salary only. No settlement payment is
made if the Executive Board member terminates
the contract prematurely.
Directors’ and Officers’ (D&O) insurance
OMV has concluded a Directors’ and Officers’ liabil-
ity insurance (D&O insurance) on a Group-wide
basis. The expenses are borne by the Company. This
insurance covers Executive Board members, Super-
visory Board members and other OMV employees
(officers). Coverage is provided for the personal
legal liability of insured persons for financial losses
resulting from wrongful acts committed while act-
ing within the scope of their function. For the actual
insurance period, the yearly premium (including
taxes) for the entire OMV Group D&O insurance
amounts to approximately EUR 600,000.
Policy principles for remuneration within the
OMV Group
In order to support OMV’s strategy best, OMV aims
to ensure competitive compensation and benefits
packages. OMV continuously monitors market
trends and international best practices in order to
attract, motivate and retain the best-qualified talent
from around the world. OMV strives for long-lasting
employment relationships. The base salaries are
set in accordance with internationally accepted
methods for determining market levels of remu-
neration and with the relevant legal regulations and
collective agreements.
The principles applicable to Executive Board remu-
neration are applied to all employees in adapted
form. Also, the remuneration for the Executive
Board of OMV Petrom is subject to OMV remunera-
tion standards. In general, OMV’s remuneration is
designed to be highly competitive within relevant
labor markets in the Oil & Gas business. This is
ensured by conducting yearly salary reviews. Fur-
thermore, the packages include a balanced and
transparent mix of fixed and variable, monetary and
non-monetary components. The base salaries are
market oriented, fair and based on the position and
know-how of the employee. In addition, OMV uses
a variety of compensation elements to strengthen
the position as an attractive employer in the Oil &
Gas business, for example:
Performance bonuses
Long Term Incentive Plans
Employee stock ownership plan
Company cars
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Beyond that, the benefits portfolio is customized
for each of the countries OMV operates in to meet
the needs of the local employees. As an example,
depending on local circumstances additional incen-
tives may include the following:
Retirement plans
Subsidized canteen
Health centers
Kindergarten
Anniversary payments
Recognition – thx!
Selected employees at senior management levels
of the Group (79 individuals) are eligible for the
Long Term Incentive Plan. They are also eligible for
bonus programs, as outlined below. In addition, the
Executive Board grants a Transformation Bonus to
selected employees at senior management levels of
the Group, which is dependent on the fulfillment of
predefined KPIs. The successful target achievement
led to a payout in 2018, potentially another will
follow in 2021.
In 2018, approximately 4,200 managers and experts
participated in a Management by Objectives (MbO)
program. The actual bonuses paid out under this
program depend on the respective target achieve-
ment. OMV also provides bonus schemes for other
employee groups, which vary from country to
country. Employee representatives are involved in
designing these incentive schemes. In all these
systems, actual bonus amounts and their payout
are dependent upon the achievement of financial
and non-financial corporate targets, as well as
individual targets agreed with each employee.
Supervisory Board
OMV’s Supervisory Board consists of ten members
elected by the General Meeting (shareholders’
representatives) and five members delegated by
the Group works council. Four of the current share-
holders’ representatives were elected at the 2014
Annual General Meeting (AGM), one was elected
at the 2015 AGM, three were elected at the 2016
AGM and two were elected at the 2018 AGM. The
members of OMV’s Supervisory Board in 2018
and their appointments to supervisory boards of
other domestic or foreign listed companies as well
as any management functions held are shown
below.
Peter Löscher, * 1957
Chairman
Seats: Sulzer AG (Chairman), Telefonica, S. A.
Gertrude Tumpel-Gugerell, * 1952
Deputy Chairwoman
Seats: Commerzbank AG, Vienna Insurance
Group AG
Murtadha Al Hashmi, * 1966
(until May 22, 2018)
Deputy Chairman
(Senior Advisor, Mubadala Investment Company
(from January 2, 2018))
Seats: no seats in domestic or foreign listed
companies
Alyazia Ali Al Kuwaiti, * 1979
(from May 22, 2018)
Deputy Chairwoman
(Executive Director Upstream & Integrated,
Mubadala Investment Company PJSC)
Seats: no seats in domestic or foreign listed
companies
Ahmed Matar Al Mazrouei, * 1972
(until May 22, 2018)
(Senior Advisor, Mubadala Investment Company
PJSC)
Seats: no seats in domestic or foreign listed
companies
Wolfgang C. Berndt, * 1942
Seats: no seats in domestic or foreign listed
companies
Helmut Draxler, * 1950
Seats: no seats in domestic or foreign listed
companies
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Marc H. Hall, * 1958
(Managing Director, R&EM – Restructuring &
Energy Management e.U.)
Seats: no seats in domestic or foreign listed
companies
Mansour Mohamed Al Mulla, * 1979
(from May 22, 2018)
(CFO Petroleum & Petrochemicals, Mubadala
Investment Company PJSC)
Seats: Aldar Properties PJSC, Waha Capital PJSC
Karl Rose, * 1961
(Strategy Advisor, Abu Dhabi National Oil Company)
Seats: no seats in domestic or foreign listed
companies
genders and the age structure are taken into ac-
count. The Supervisory Board includes five women
and three non-Austrian nationals. The members of
the Supervisory Board are aged between 38 and 76.
Independence
The Supervisory Board has defined the criteria
that constitute independence (resolutions dated
March 21, 2006, and March 25, 2009). In addition
to the guidelines set out in Annex 1 of the ACCG,
the Supervisory Board has established the follow-
ing criteria with regard to its members elected by
the General Meeting:
A Supervisory Board member shall not serve on
the Executive Board of an OMV Group company.
Herbert Werner, * 1948
(Managing Director, HCW Verkehrsbetriebe GmbH;
Managing Director, HCW Vermögensverwaltungs
GmbH)
Seats: Ottakringer Getränke AG (Deputy Chairman)
A Supervisory Board member shall not hold
stock options issued by the Company or any
affiliated company, or receive any other perfor-
mance-related remuneration from an OMV
Group company.
Elif Bilgi Zapparoli, * 1967
(Global Co-Head Capital Markets, Bank of
America Merrill Lynch)
Seats: no seats in domestic or foreign listed
companies
Delegated by the Group works council
(employee representatives)
Christine Asperger, * 1964
Herbert Lindner, * 1961
Alfred Redlich, * 1966
Gerhard Singer, * 1960
Wolfgang Baumann, * 1958 (until March 23, 2018)
Angela Schorna, * 1980 (from March 23, 2018)
More detailed information about all members of
OMV’s Supervisory Board, including their profes-
sional careers, can be downloaded from OMV’s
website at www.omv.com > About us > Supervisory
Board.
Diversity
The main considerations in selecting the members
of the Supervisory Board are relevant knowledge,
personal integrity and experience in executive posi-
tions. Furthermore, aspects of diversity of the
Supervisory Board with respect to the internation-
ality of the members, the representation of both
A Supervisory Board member shall not be a
shareholder with a controlling interest in the
meaning of EU Directive 83/349/EEC (i.e. a share-
holder’s interest of 50% or a dominant influence,
e.g. through the right to appoint Board members)
or represent such a shareholder.
All members elected by the General Meeting except
Helmut Draxler and Herbert Werner, regarding the
duration of their terms, have declared their indepen-
dence from the Company and its Executive Board
during the 2018 financial year and up to the time of
making such declarations (C-rule 53 of the ACCG).
Under C-rule 54 of the ACCG, Peter Löscher, Wolf-
gang C. Berndt, Elif Bilgi Zapparoli, Helmut Draxler,
Karl Rose, Marc H. Hall, Gertrude Tumpel- Gugerell
and Herbert Werner have made declarations to the
effect that they were not shareholders with a stake
of more than 10% or represented such sharehold-
ers’ interests during the financial year 2018 and up
to the time of making such declarations. Peter
Löscher, Gertrude Tumpel-Gugerell, Marc H. Hall
and Karl Rose were nominated for the election
as Supervisory Board members by the nomination
committee of the Österreichische Bundes- und
Industriebeteiligungen GmbH (“ÖBIB”)1 and, sub-
sequently (after being so proposed by the Presi-
dential and Nomination Committee and the Super-
visory Board), they were elected as Supervisory
Board members.
1 With effect as of February 20, 2019 Österreichische Bundes- und Industriebeteiligungen GmbH was transformed into a joint-stock company and
renamed as Österreichische Beteiligungs AG.
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Position and committee memberships
Name
Peter Löscher
Gertrude Tumpel-
Gugerell
Murtadha Al Hashmi
Alyazia Ali Al Kuwaiti
Wolfgang C. Berndt
Helmut Draxler
Marc H. Hall
Ahmed Matar Al
Mazrouei
Mansour Mohamed
Al Mulla
Karl Rose
Herbert Werner
Elif Bilgi Zapparoli
Christine Asperger
Wolfgang Baumann
Herbert Lindner
Alfred Redlich
Gerhard Singer
Angela Schorna
SB
C
DC
DC
DC
M
M
M
M
M
M
M
M
M
M
M
M
M
M
Supervisory Board and
Committees 2018 1
AC
PPC
PNC
C
DC
DC
DC
–
–
–
M
M
–
–
–
M 6
M
–
M
–
M 7
DC
M
DC
DC
–
–
M
M
M
C
–
–
M 7
–
M
M 6
M
–
M
C
DC
DC
DC
M
–
–
–
–
M
–
–
M
M
–
M
M
RC
C
M
DC
DC
DC
M
–
–
–
–
–
–
–
–
–
–
–
–
Remuneration
Term of office
2017 2
in EUR
80,000
61,000
73,000
–
44,000
40,000
30,000
2018 3
in EUR
80,000 May 18, 2016, to 2020 AGM
May 19, 2015, to 2020 AGM
67,110
28,400 May 10, 2012, to May 22, 2018
May 14, 2008, to May 18, 2016
and May 22, 2018, to 2019 AGM
44,600
44,000 May 26, 2010, to 2019 AGM
Oct. 16, 1990, to 2019 AGM
40,000
30,000 May 18, 2016, to 2019 AGM
May 18, 2016, to May 22, 2018
40,000
15,562
–
34,000
30,000
20,000
– 4
– 4
– 4
– 4
– 4
– 4
May 22, 2018, to 2019 AGM
24,438
34,000 May 18, 2016, to 2019 AGM
June 4, 1996, to 2019 AGM
30,000
20,000 May 13, 2009, to 2019 AGM
– 4 Since Jan. 1, 2013 5
Dec. 16, 1998, to Apr. 1, 1999,
and Nov. 11, 2004,
– 4
to March 23, 2018 5
– 4 Since June 1, 2013 5
– 4 Since June 1, 2013 5
– 4 Since Sept. 26, 2016 5
– 4 Since March 23, 2018 5
1 Abbreviations: SB = Supervisory Board, PNC = Presidential and Nomination Committee, PPC = Portfolio and Project Committee, AC = Audit Committee,
RC = Remuneration Committee. C = Chairman/Chairwoman; DC = Deputy Chairman/Chairwoman; M = Member; AGM = Annual General Meeting;
Members of the Supervisory Board whose term ended in the business year 2017 are not listed herein
2 Meeting fees in the amount of EUR 400/meeting, as well as any applicable reimbursement of withholding tax, are not included therein
3 Based on remuneration as adopted by the AGM 2018; subject to approval by the 2019 AGM
4 Members delegated to the Supervisory Board by the Group works council do not receive remuneration but just attendance expenses
5 Delegation by the Group works council is for an indefinite period of time; however, the employee representatives may be recalled at any time by the
delegating body
6 since June 27, 2018
7 until June 27, 2018
Working practices of the Supervisory Board
The Supervisory Board fulfills its duties – in par-
ticular supervising the Executive Board and advis-
ing it on strategy – by discussing the Company’s
situation and objectives during board meetings.
Decisions are also taken at these meetings, except
in cases of urgency where decisions can be taken
by circular vote. The set-up of four committees
ensures that best possible use is made of the Super-
visory Board members’ expertise. Brief descriptions
of these committees are given below (see also the
Report of the Supervisory Board for an overview of
the individual committees’ main activities in 2018).
In 2018, six meetings of the Supervisory Board and
16 Committee meetings were held. In several of
these meetings, the Executive Board and the Super-
visory Board discussed strategic matters of OMV.
No member of the Supervisory Board attended
fewer than half of the meetings.
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Attendance of Supervisory Board and Committee
meetings in 2018 was as follows:
Attendance of Supervisory Board and Committee
Meetings in 2018 1
RC
3/3
1/13
2/2
1/1
3/3
3/3
Name
Peter Löscher
Gertrude Tumpel-
Gugerell
Murtadha Al Hashmi2
Alyazia Ali Al Kuwaiti3
Wolfgang C. Berndt
Helmut Draxler
Marc H. Hall
Ahmed Matar
Al Mazrouei2
Mansour Mohamed
Al Mulla3
Karl Rose
Herbert Werner
Elif Bilgi Zapparoli
Christine Asperger
Wolfgang Baumann4
Herbert Lindner
Alfred Redlich
Angela Schorna5
Gerhard Singer
SB
6/6
6/6
1/2
2/4
6/6
6/6
6/6
PNC
PPC
3/3
4/4
2/3
2/2
1/1
2/4
0/1
2/3
4/4
2/2
2/2
1/1
4/4
5/6
6/6
4/6
6/6
1/1
6/6
6/6
5/5
6/6
1/1
2/3
3/4
1/16
1/1
3/3
1/17
1/17
4/4
3/36
4/4
AC
6/6
5/6
3/3
2/3
6/6
5/6
6/6
2/2
6/6
3/4
5/6
1 Abbreviations: SB = Supervisory Board, PNC = Presidential and Nomination
Committee, PPC = Portfolio and Project Committee, AC = Audit Committee,
RC = Remuneration Committee.
² until May 22, 2018
³ since May 22, 2018
4 until March 23, 2018
5 since March 23, 2018
6 since June 27, 2018
7 until June 27, 2018
The Supervisory Board performed a self-evaluation
and discussed the efficiency of its activities, in
particular its organization and work procedures.
Presidential and Nomination Committee
This committee is empowered to take decisions on
matters of urgency. The Supervisory Board may
transfer other duties and powers of approval to the
Presidential and Nomination Committee on an ad
hoc or permanent basis. In its capacity as the Nom-
ination Committee, this body makes proposals
to the Supervisory Board for the appointment or
replacement of Executive Board members and
deals with succession planning. It also makes rec-
ommendations to the General Meeting for appoint-
ments to the Supervisory Board. There were three
meetings of the Presidential and Nomination Com-
mittee in 2018, in which discussions focused on
Executive and Supervisory Board matters.
Audit Committee
This committee performs the duties established
by section 92 (4a) Stock Corporation Act. The com-
mittee held six meetings during the year. It pre-
dominantly dealt with preparations for the audit of
the annual financial statements, assessment of
the auditors’ activities, internal audit, internal con-
trol and risk management systems, as well as
the presentation of the annual financial statements.
Gertrude Tumpel-Gugerell is the financial expert
within the Audit Committee in the meaning of sec-
tion 92 (4a) (1) Stock Corporation Act.
Auditors
The Supervisory Board monitors auditors’ indepen-
dence and reviews a breakdown of the audit fees
and fees for additional services besides auditing
activities. In 2018, the auditors Ernst & Young Wirt-
schaftsprüfungsgesellschaft m.b.H. (including
their network in the meaning of section 271b Code
of Commerce) received EUR 2.94 mn for the
annual audit, EUR 0.64 mn for other assurance ser-
vices, EUR 0.05 mn for tax advisory services and
EUR 0.24 mn for other engagements.
Portfolio and Project Committee
This committee supports the Executive Board in
preparing complex decisions on key issues where
necessary and reports on these decisions and any
recommendations to the Supervisory Board. In
2018, four meetings of the Portfolio and Project
Committee were held.
Remuneration Committee
This committee deals with all aspects of the remu-
neration of Executive Board members and with
their employment contracts. The committee’s mem-
bership does not include employee representatives.
The committee is empowered to conclude, amend
and terminate Executive Board members’ employ-
ment contracts and to take decisions on the award-
ing of bonuses (variable remuneration compo-
nents) and other such benefits to them. The Remu-
neration Committee met three times during 2018.
Executive Board members were invited to attend
parts of some of the meetings of the Remuneration
Committee.
HKP Group provided remuneration advice to the
Committee, which included advice on the appropri-
ate structure and level of Executive Board com-
pensation in line with regulatory requirements and
market practice.
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
They were appointed by the Remuneration Com-
mittee and did not advise the OMV Executive
Board, ensuring independence with respect to the
Austrian Code of Corporate Governance.
Rights of minority shareholders
General Meeting: An Extraordinary General
Meeting must be convened at the request of
shareholders holding not less than 5% of the
shares.
Agenda items must be included at the request
of shareholders holding not less than 5% of the
shares.
Shareholders holding not less than 1% of the
shares may submit resolution proposals on
all agenda items. Such resolution proposals must
be posted on the website upon request of the
respective shareholders.
Shareholders holding not less than 10% of the
shares may require an extraordinary audit in the
event of grounds for suspicion of irregularities,
or gross violations of the law or the Articles of
Association.
All shareholders having duly provided evidence
of their shareholding are entitled to attend Gen-
eral Meetings, ask questions and vote.
Election of the Supervisory Board: If elections
for two or more positions to the Supervisory
Board are held at the same General Meeting,
separate votes must be held for each position. If
elections for three or more seats on the Super-
visory Board are held at the same General Meet-
ing, and if prior to the vote on the last position
to be assigned it is found that at least one-third
of all the votes have been cast in favor of the
same person but he or she has not been elected,
then this person must be declared as Supervisory
Board member.
Conflicts of interest and dealings by members
of the Supervisory Board requiring approval
There were no transactions requiring approval in
accordance with section 95 (5) (12) Stock Corpora-
tion Act. The Internal Rules of the Supervisory
Board contain detailed procedures for the treatment
of conflicts of interest on the part of Supervisory
Board members.
Remuneration
In accordance with the Articles of Association, the
AGM resolves the remuneration of the Supervisory
Board members elected by the General Meeting for
the previous financial year. The 2018 AGM adopted
the remuneration scale for the 2017 financial year
as shown in the table below.
Remuneration for Supervisory Board members
In EUR 1
Chairman/Chairwoman
Deputy Chairman/Chairwoman
Ordinary member
Committee Chairman/Chairwoman
Committee Deputy Chairman/Chairwoman
Ordinary Committee member
30,000
25,000
20,000
14,000
12,000
10,000
1 Meeting fees in the amount of EUR 400/meeting, as well as any applicable
reimbursement of withholding tax, are not included therein
The amounts for the 2017 financial year were dis-
bursed to the Supervisory Board members con-
cerned in 2018; these were exclusive of expenses
(travel and attendance expenses). In 2018, the
Supervisory Board members’ remuneration (for the
2017 financial year and including reimbursement
for withholding tax as applicable) accounted for
EUR 0.51 mn, attendance expenses for EUR 0.07 mn
and travel expenses for EUR 0.25 mn.
Employee participation
The Group works council holds regular meetings
with the Executive Board in order to exchange
information on developments affecting employees.
Furthermore, the Group works council has made
use of its right to delegate members to the Super-
visory Board (one employee representative for
every two members elected by the General Meet-
ing). Therefore, out of the 15 Supervisory Board
members, five members are employee represen-
tatives.
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OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
Women’s Advancement and Diversity
Concept
Diversity is an enormous strength that OMV active-
ly builds on now, and in the future. Consequently
OMV strives to continuously develop new initiatives
and measures that promote diversity and equal
opportunities. OMV is committed to its Group diver-
sity strategy with focus on gender and internation-
ality. Being active in an industry with a strong tech-
nical focus, it is particularly challenging for OMV
to achieve a satisfactory gender balance in all fields
of business activity. OMV is committed to support-
ing women’s advancement to managerial positions.
The strategic objective is to achieve the best diver-
sity mix at the senior management level. The aim
is to increase the female representation in Senior
Leadership roles, from 18% to 25% by 2025 through
a number of initiatives such as mentoring, succes-
sion planning, specific trainings as well as initiatives
to increase work/life flexibility.
The proportion of women in the Group as a whole
is approximately 25%. Within OMV’s leadership
development programs, in 2018 the proportion of
women was 28% (22% in 2017). In the First Time
Leaders program for new leaders, OMV reached a
remarkable rate of 38% of female participants. With-
in OMV’s Upstream integrated graduate develop-
ment program for technical skill pools, the propor-
tion of women was 25% in 2018 (22% in 2017). The
topic of diversity has been incorporated in all
Leadership Development programs and embedded
in the OMV People Strategy.
OMV promotes talents from different backgrounds,
thus ensuring the best mix in diverse teams. OMV
especially supports the recruitment and develop-
ment of women in technical positions.
Through using gender-neutral language in OMV’s
job advertisements and through publishing all job
advertisements internally, together with the con-
stant monitoring of gender, age, employee back-
ground, seniority as well as salary equality, OMV is
ensuring fair treatment and contributing to equal
opportunities among men and women at all career
stages.
Female employees initiated a Diversity Network to
raise awareness for diversity topics and to boost
female careers in the technical area through a col-
laboration site and joint activities.
OMV Head Office in Vienna has two company kin-
dergartens attended by children of OMV employees.
In order to spark girls’ interest in technical careers
early on in their lives OMV again participated in
Vienna’s Girls’ Day.
The Executive Board and Supervisory Board con-
sider the described measures and programs to fos-
ter the variety of the workforce as a key element to
strengthen the diversity of the internal pool of
Executive Board succession candidates. The Presi-
dential and Nomination Committee concerns itself
at least once a year with the identification and
development of internal potentials. In addition to
internal succession planning, the Supervisory
Board also makes use of external recruitments in
order to best fill open Executive Board positions.
In the selection of Executive Board members – be
it internally or externally – special attention is given
to balance gender, age, and international experi-
ence in addition to professional skills.
Currently, no woman is part of the Executive Board
of OMV. The Executive Board members of OMV are
between 53 and 58 years old, comprise two differ-
ent nationalities, and have acquired comprehensive
international management experience.
Until 2018, the Supervisory Board members elected
by the Annual General Meeting upon proposal by
ÖBIB were nominated by the Nomination Commit-
tee of the Austrian Federal Government. The selec-
tion of candidates is based on various criteria, par-
ticularly the candidates’ professional skills, per-
sonal integrity, independence, and impartiality. In
addition, diversity aspects such as the represen-
tation of both genders, a balanced age distribution,
and internationality of members is taken into con-
sideration.
101
OMV ANNUAL REPORT 2018 / CONSOLIDATED CORPORATE GOVERNANCE REPORT
At present, the Supervisory Board of OMV includes
five women, corresponding to a share of 30%. Par-
ticular focus will be given to a further strengthening
of industry-specific competencies and the interna-
tionality of Supervisory Board members in line with
the company’s strategic orientation. With members
aged between 38 and 76 years, the Supervisory
Board shows a balanced age structure.
External evaluation of Corporate
Governance
An external evaluation of OMV’s compliance with
the provisions of the ACCG is performed each year.
Regarding the evaluation for 2018, OMV engaged
Mathias Ettel of the law firm Berger Ettel Rechts an-
wälte. The official questionnaire of the Austrian
Working Group for Corporate Governance was used
for the evaluation, and the result was that OMV
is in full compliance with the Austrian Corporate
Governance Code including all non-compulsory
recommendations. The report of the evaluation is
available for download on OMV’s website (www.
omv.com).
Vienna, March 13, 2019
The Executive Board
Rainer Seele m.p.
Johann Pleininger m.p.
Reinhard Florey m.p.
Manfred Leitner m.p.
102
CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES
103 – 224
104 — Auditor’s Report
114 — Consolidated Income Statement for 2018
115 — Consolidated Statement of Comprehensive Income for 2018
116 — Consolidated Statement of Financial Position as of December 31, 2018
118 — Consolidated Statement of Changes in Equity for 2018
120 — Consolidated Statement of Cash Flows for 2018
Notes to the Consolidated Financial Statements
121 — Basis of Preparation and Accounting Policies
141 — Segment Reporting
145 — Notes to the Income Statement
152 — Notes to the Statement of Financial Position
183 — Supplementary Information on the Financial Position
200 — Other Information
214 — Oil and Gas Reserve Estimation and Disclosures (unaudited)
224 — Executive Board
Key Audit Matters
Key audit matters are those matters that, in our pro-
fessional judgment, were of most significance in
our audit of the consolidated financial statements
of the fiscal year. These matters were addressed
in the context of our audit of the consolidated finan-
cial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate
opinion on these matters.
We considered the following matters as key audit
matters for our audit:
1. Purchase Price Allocation acquisition Upstream
business New Zealand
2. Recoverability of intangible exploration and
evaluation (E&E) assets
3. Estimation of oil and gas reserves
4. Recoverability of receivables from Romanian
State
5. Estimation of provision for decommissioning
and restoration obligations
Auditor’s Report 1
Report on the Consolidated Financial
Statements
Audit Opinion
We have audited the consolidated financial state-
ments of
OMV Aktiengesellschaft, Vienna,
and of its subsidiaries (the Group) comprising the
consolidated statement of financial position as of
December 31, 2018, the consolidated income state-
ment, the consolidated statement of comprehen-
sive income, the consolidated statement of changes
in equity and the consolidated statement of cash
flows for the fiscal year then ended and the notes
to the consolidated financial statements except for
“Oil and Gas Reserve Estimation and Disclosures
(unaudited)”.
Based on our audit the accompanying consolidated
financial statements were prepared in accordance
with the legal regulations and present fairly, in all
material respects, the assets and the financial posi-
tion of the Group as of December 31, 2018 and its
financial performance for the year then ended in
accordance with the International Financial Report-
ing Standards (IFRSs) as adopted by EU, and the
additional requirements under Section 245a Austrian
Company Code (UGB).
Basis for Opinion
We conducted our audit in accordance with the
regulation (EU) no. 537/2014 (in the following “EU
regulation”) and in accordance with Austrian Stan-
dards on Auditing. Those standards require that we
comply with International Standards on Auditing
(ISA). Our responsibilities under those regulations
and standards are further described in the “Auditor’s
Responsibilities for the Audit of the Consolidated
Financial Statements” section of our report. We are
independent of the Group in accordance with the
Austrian General Accepted Accounting Principles
and professional requirements and we have fulfilled
our other ethical responsibilities in accordance
with these requirements. We believe that the audit
evidence we have obtained is sufficient and appro-
priate to provide a basis for our opinion.
1 This report is a translation of the original report in German, which is solely valid. Publication or sharing with third parties of the consolidated financial
statements together with our auditor’s opinion is only allowed if the consolidated financial statements and the director’s report for the Group are identical
with the German audited version. This audit opinion is only applicable to the German and complete consolidated financial statements with the director’s
report for the Group. Section 281 paragraph 2 UGB (Austrian Company Code) applies to alternated versions.
104
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Key Audit Matter
How our audit addressed the key audit matter
Purchase Price Allocation acquisition Upstream
business New Zealand
We assessed management’s purchase price allo-
cation. Specifically our work included, but was not
limited to, the following procedures:
Read the purchase agreement to gain an under-
standing of the key terms and conditions and
to assess the adequacy of the accounting treat-
ment;
Assess the competence of external specialists
and the objectivity and independence of external
specialists, to consider whether they were
appropriately qualified to carry out the valuation;
Assess the valuation model, the cash flow fore-
casts, and the key assumptions used in the
calculation of the assets’ and decommissioning
and restoration obligations’ fair value;
Engage our internal valuation specialist to assist
us in the audit of the purchase price allocation
and discount rates used; and
Assess the adequacy of the Group’s disclosures
in the financial statements.
On December 28, 2018, OMV completed the acqui-
sition of Shell’s Upstream business in New Zea-
land. The net assets acquired at 28 December 2018
amounted to EUR 468 mn.
Under IFRS, an entity is required to allocate the
purchase price in recognizing assets acquired and
liabilities assumed at the acquisition date at fair
values.
The valuation of assets acquired and liabilities
assumed is judgmental and complex, requiring
significant judgement in applying forecasts and
assumptions made by management.
The principal risk relates to the initial estimates
of the fair values of the identifiable assets and
decommissioning and restoration obligations
assumed together with the deferred taxes on
acquisition in preparing the purchase price allo-
cation.
Given the extent of the judgment in valuing these
assets and obligations, we believe that the fair
value calculation carries significant risk of material
misstatement.
OMV management engaged an independent
expert to provide valuation support with respect to
the determination of the fair values of the assets
acquired and liabilities assumed under IFRS 3.
OMV Group’s disclosures about the acquisition
of upstream business New Zealand are included
in Note 3 (Changes in group structure).
105
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Key Audit Matter
How our audit addressed the key audit matter
Recoverability of intangible exploration and
evaluation (E&E) assets
The carrying value of intangible E&E assets
amounted to EUR 1,906 mn at 31 December 2018,
after a write off (impairment) of EUR 51 mn in 2018.
We evaluated management’s assessment of the
carrying value of intangible E&E assets performed
with reference to the criteria of IFRS 6 and the
Group’s accounting policy. Specifically our work
included, but was not limited to, the following
procedures:
Under IFRS 6, Exploration for and Evaluation of
Mineral Resources, exploration and evaluation
assets shall be assessed for impairment when
facts and circumstances suggest that the carrying
value of an exploration and evaluation asset may
exceed its recoverable amount.
Inquire whether management has the intention
to carry out exploration and evaluation activity
in the relevant exploration area which included
the review of management’s budget and discus-
sions with senior management as to the inten-
tions and strategy of the Group;
The assessment of the carrying value requires
management to apply judgement and estimates in
assessing whether any impairment has arisen at
yearend, and in quantifying any such impairment.
Read Executive Board minutes of meetings and
consider whether there were negative indicators
that certain projects might be unsuccessful;
The principal risks relate to management’s intention
to proceed with a future work program for a pros-
pect or licence, the likelihood of licence renewal,
and the success of drilling and geological analysis
to date.
Discuss with management about the status of
the largest exploration projects;
Assess whether the Group has the ability to
finance any planned future exploration and
evaluation activity;
OMV Group’s disclosures about intangible E&E
assets and related impairment testing are included
in Note 2 (Accounting policies, judgements and
estimates), Note 7 (Depreciation, amortization and
impairment charges) and Note 14 (Intangible assets).
Identify the existence of any fields where the
Group’s right to explore is either at, or close to,
expiry and review management’s assessment
whether there are any risks related to renewal
of the licence;
Review of supporting evidence where an E&E
asset has been impaired; and
Assess the adequacy of the Group’s disclosures
in the financial statements.
106
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Key Audit Matter
How our audit addressed the key audit matter
Estimation of oil and gas reserves
Oil and gas reserves are an indicator of the future
potential of the group’s performance. Furthermore,
they have an impact on the financial statements
as they are the basis for
production profiles in future cash flow estimates
Our procedures have focused on management’s
estimation process in the determination of oil and
gas reserves. Specifically our work included, but
was not limited to, the following procedures:
Walkthrough and understand the Group’s pro-
cess and controls associated with the oil and gas
reserves estimation process;
depreciation, amortization and impairment
Test controls of the oil and gas reserves review
charges and
process;
the valuation of the financial asset related to
the reserves redetermination right out of
the prior year acquisition of an interest in the
Yuzhno- Russkoye field.
Analysis of the internal certification process for
technical and commercial specialists who are
responsible for oil and gas reserves estimation;
Assess the competence of both internal and
The estimation of oil and gas reserves requires
judgement and assumptions made by management
and engineers due to the technical uncertainty in
assessing quantities.
external specialists and the objectivity and inde-
pendence of external specialists, to consider
whether they were appropriately qualified to
carry out the estimation of oil and gas reserves;
The principal risk of the oil and gas reserves esti-
mate is the impact on the group’s financial state-
ments through impairment testing, depreciation &
amortization, decommissioning provision estimate
and the valuation of the financial asset related to
the reserves redetermination right.
OMV Group’s disclosures about oil and gas reserves
and related impairment testing are included in
Note 2 (Accounting policies, judgements and esti-
mates), Note 7 (Depreciation, amortization and
impairment charges), Note 18 (Financial assets) and
Note 23 (Provisions).
Analyse the report of DeGolyer and MacNaughton
(D&M) on their review of Group’s estimated oil
and gas reserves as at 31 December 2017 and
analyse the report of the additional external spe-
cialist engaged by OMV for one case in 2018;
Test whether significant additions or reductions
in oil and gas reserves were made in the period
in which the new information became available
and in compliance with Group’s Reserves and
Resources Guidelines;
Test that the updated oil and gas reserve esti-
mates were included appropriately in the Group’s
consideration of impairment, in accounting for
depreciation & amortization and the valuation of
the financial asset related to the reserves rede-
termination right; and
Assess the adequacy of the Group’s disclosures
in the financial statements.
107
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Key Audit Matter
How our audit addressed the key audit matter
Recoverability of receivables
from Romanian State
As part of the privatization agreement regarding
OMV Petrom SA, the Group is entitled to the reim-
bursement by the Romanian State of part of wells
abandonment (decommissioning) and environ-
mental costs incurred to restore and clean up areas
pertaining to activities prior to privatization in 2004.
Consequently, the Group has recorded receivables
from the Romanian State amounting to EUR 378 mn
at 31 December 2018.
The assessment of the recoverability of the receiv-
ables from the Romanian State, requires manage-
ment to make judgements and estimates to assess
the uncertainty regarding the expenditure recover-
able from Romanian State. The assessment process
considers inter alia history of amounts claimed,
documentation process and requirements, arbitra-
tion proceedings.
OMV Group’s disclosures about Environmental and
Decommissioning State Receivables are included
in Note 2 (Accounting policies, judgements and esti-
mates) and Note 18 (Financial assets).
We assessed management’s estimate regarding
recoverability of the receivables from the Romanian
State. Our work included, but was not limited to,
the following procedures:
Read the stipulations of the Annex P of the pri-
vatization agreement dated 23 July 2004, related
to the acquisition by OMV Aktiengesellschaft
of shares in the National Petroleum Company
Petrom SA, as approved by Law no. 555/2004.
Annex P includes stipulations related to the obli-
gation of the seller (i.e. Ministry of Economy
and Commerce) to reimburse the Company for
historical environmental losses and abandon-
ment costs, provided certain conditions are met;
Review management’s assessment of the recov-
erability of the receivables from the Romanian
State, including the history of amounts claimed
vs. amounts accepted and reimbursed, and dis-
cuss with management about the status of the
notices of claims submitted by the Group and of
the arbitration process;
Trace the receivables for which notices of claim
have been submitted to the respective notices of
claims;
Trace the receivables for which decommission-
ing was performed but the notices of claim have
not yet been submitted to the respective decom-
missioning costs;
Trace the receivables for which decommissioning
has not yet been performed against the respective
decommissioning provisions;
Discuss with management the estimates of
timing of collection;
Involve our valuation specialists to assist us in
the analysis of discount rates and inflation rates;
Test the mathematical accuracy of the calculation
of the net present value of the receivables record-
ed; and
Assess the adequacy of the Group’s disclosures
in the financial statements.
108
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Key Audit Matter
How our audit addressed the key audit matter
Estimation of provision for decommissioning
and restoration obligations
The total provision for decommissioning and
restoration obligations amounted to EUR 3,736 mn
at 31 December 2018.
Group’s core activities regularly lead to obligations
related to dismantling and removal, asset retirement
and soil remediation activities.
The principal risk relates to management’s estimates
of future costs, discount rates and inflation rates,
which are used to project the provision for decom-
missioning and restoration obligations.
OMV Group’s disclosures about the provision for
decommissioning and restoration obligations
are included in Note 2 (Accounting policies, judge-
ments and estimates) and Note 23 (Provisions).
We assessed management’s annual estimation of
the provision for decommissioning and restoration
obligations. Specifically our work included, but was
not limited to, the following procedures:
Assess the design and implementation of the
controls over the decommissioning and resto-
ration obligations estimation process;
Compare current estimates of costs with actual
decommissioning and restoration costs previous-
ly incurred. Where no previous data was avail-
able, we reconciled cost estimates to third party
evidence or the Group’s engineers’ estimates;
Inspection of supporting evidence for any material
revisions in cost estimates during the year;
Confirm whether the decommissioning dates are
consistent with the Group’s budget and business
plans;
Involve our valuation specialists to assist us in
the analysis of discount rates and inflation rates;
and
Test the mathematical accuracy of the decom-
missioning and restoration obligation calculation;
and
Assess the adequacy of the Group’s disclosures
in the financial statements.
109
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Responsibilities of Management and of
the Audit Committee for the Consolidated
Financial Statements
Auditor’s Responsibilities for the Audit
of the Consolidated Financial
Management is responsible for the preparation of
the consolidated financial statements in accordance
with IFRS as adopted by the EU, and the additional
requirements under Section 245a Austrian Com-
pany Code (UGB) for them to present a true and
fair view of the assets, the financial position and
the financial performance of the Group and for
such internal controls as management determines
are necessary to enable the preparation of consol-
idated financial statements that are free from mate-
rial misstatement, whether due to fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the
Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless management either intends to
liquidate the Group or to cease operations, or has
no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance
about whether the consolidated financial state-
ments as a whole are free from material misstate-
ment, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Rea-
sonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in
accordance with the EU regulation and in accor-
dance with Austrian Standards on Auditing, which
require the application of ISA, always detect a mate-
rial misstatement when it exists. Misstatements
can arise from fraud or error and are considered
material if, individually or in the aggregate, they
could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with the EU regu-
lation and in accordance with Austrian Standards
on Auditing, which require the application of ISA,
we exercise professional judgment and maintain
professional scepticism throughout the audit.
The Audit Committee is responsible for overseeing
the Group’s financial reporting process.
We also:
identify and assess the risks of material misstate-
ment of the consolidated financial statements,
whether due to fraud or error, design and per-
form audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
The risk of not detecting a material misstate-
ment resulting from fraud is higher than for one
resulting from error, as fraud may involve col-
lusion, forgery, intentional omissions, misrepre-
sentations, or the override of internal control;
110
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS obtain an understanding of internal control rele-
vant to the audit in order to design audit proce-
dures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion
on the effectiveness of the Group’s internal con-
trol;
We communicate with the Audit Committee re-
garding, among other matters, the planned scope
and timing of the audit and significant audit find-
ings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide the Audit Committee with a state-
ment that we have complied with relevant ethical
requirements regarding independence, and to com-
municate with them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit
Committee, we determine those matters that were
of most significance in the audit of the financial
statements of the current period and are therefore
the key audit matters. We describe these matters
in our auditor’s report unless law or regulation pre-
cludes public disclosure about the matter or when,
in extremely rare circumstances, we determine
that a matter should not be communicated in our
report because the adverse consequences of doing
so would reasonably be expected to outweigh
the public interest benefits of such communication.
evaluate the appropriateness of accounting poli-
cies used and the reasonableness of accounting
estimates and related disclosures made by man-
agement;
conclude on the appropriateness of manage-
ment’s use of the going concern basis of account-
ing and, based on the audit evidence obtained,
whether a material uncertainty exists related
to events or conditions that may cast significant
doubt on the Group’s ability to continue as a
going concern. If we conclude that a material
uncertainty exists, we are required to draw atten-
tion in our auditor’s report to the related disclo-
sures in the consolidated financial statements
or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our
auditor’s report. However, future events or con-
ditions may cause the Group to cease to contin-
ue as a going concern;
evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner
that achieves fair presentation;
obtain sufficient appropriate audit evidence re-
garding the financial information of the entities
or business activities within the Group to express
an opinion on the consolidated financial state-
ments. We are responsible for the direction, super-
vision and performance of the group audit. We
remain solely responsible for our audit opinion.
111
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS Report on Other Legal and Regulatory
Requirements
Comments on the Director’s Report for the Group
Pursuant to Austrian Generally Accepted Accounting
Principles, the director’s report for the Group is
to be audited as to whether it is consistent with the
consolidated financial statements and as to whether
the director’s report for the Group was prepared
in accordance with the applicable legal regulations.
Management is responsible for the preparation of
the director’s report for the Group in accordance
with Austrian Generally Accepted Accounting Prin-
ciples.
We conducted our audit in accordance with Austrian
Standards on Auditing for the audit of the director’s
report for the Group.
Opinion
In our opinion, the director’s report for the Group
was prepared in accordance with the valid legal
requirements, comprising the details in accordance
with Section 243a Austrian Company Code (UGB),
and is consistent with the consolidated financial
statements.
Statement
Based on the findings during the audit of the con-
solidated financial statements and due to the thus
obtained understanding concerning the Group
and its circumstances no material misstatements
in the director’s report for the Group came to our
attention.
Other Information
Management is responsible for the other infor-
mation. The other information comprises the infor-
mation included in the annual report, but does not
include the consolidated financial statements, the
director’s report for the Group and the auditor’s
report thereon. The annual report is estimated to
be provided to us after the date of the auditor’s
report. Our opinion on the consolidated financial
statements does not cover the other information
and we do not express any form of assurance con-
clusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read
the other information, as soon as it is available,
and, in doing so, to consider whether – based on
our knowledge obtained in the audit – the other
information is materially inconsistent with the con-
solidated financial statements or otherwise appears
to be materially misstated.
Additional information in accordance with
article 10 EU regulation
We were elected as auditor by the ordinary general
meeting at May 22, 2018. We were appointed by the
Supervisory Board on June 7, 2018. We are auditors
without cease since 2011.
We confirm that the audit opinion in the Section
“Report on the consolidated financial statements”
is consistent with the additional report to the audit
committee referred to in article 11 of the EU regu-
lation.
We declare that no prohibited non-audit services
(article 5 par. 1 of the EU regulation) were provided
by us and that we remained independent of the
audited company in conducting the audit.
Responsible Austrian Certified Public Accountant
The engagement partner on the audit resulting
in this independent auditor’s report is Mr. Gerhard
Schwartz, Certified Public Accountant.
Vienna, March 13, 2019
Ernst & Young
Wirtschaftsprüfungsgesellschaft m. b. H.
Gerhard Schwartz m.p.
Wirtschaftsprüfer/Certified Public Accountant
Alexander Wlasto m.p.
Wirtschaftsprüfer/Certified Public Accountant
112
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS 113
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Consolidated Income Statement for 2018
Consolidated income statement
In EUR mn
Sales revenues
Other operating income
Net income from equity-accounted investments
Total revenues and other income
Purchases (net of inventory variation)
Production and operating expenses
Production and similar taxes
Depreciation, amortization and impairment charges
Selling, distribution and administrative expenses
Exploration expenses
Other operating expenses
Operating Result
Dividend income
Interest income
Interest expenses
Other financial income and expenses
Net financial result
Profit before tax
Taxes on income
Net income for the year
thereof attributable to stockholders of the parent
thereof attributable to hybrid capital owners
thereof attributable to non-controlling interests
Basic Earnings Per Share in EUR
Diluted Earnings Per Share in EUR
Note
4, 5
6
6, 16
17
7
7, 8
9
31
11, 31
11, 31
11, 31
12
13
13
2018
22,930
517
391
23,839
(14,094)
(1,594)
(392)
(1,827)
(1,749)
(175)
(485)
3,524
20
117
(290)
(72)
(226)
3,298
(1,305)
1,993
1,438
78
477
4.40
4.40
2017
20,222
488
510
21,220
(12,331)
(1,645)
(311)
(1,852)
(1,636)
(221)
(1,491)
1,732
15
64
(265)
(60)
(246)
1,486
(634)
853
435
103
315
1.33
1.33
114
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
for 2018
Consolidated statement of comprehensive income
In EUR mn
Net income for the year
Note
2018
1,993
2017
853
Exchange differences from translation of foreign operations
Gains/(losses) arising during the year, before income taxes
Reclassification of (gains)/losses to net income
Gains/(losses) on hedges
Gains/(losses) arising during the year, before income taxes
Reclassification of (gains)/losses to net income
Share of other comprehensive income of equity-accounted investments
Total of items that may be reclassified (“recycled”) subsequently to
the income statement
Remeasurement gains/(losses) on defined benefit plans
Gains/(losses) on equity investments
Gains/(losses) on hedges that are subsequently transferred to the carrying
amount of the hedged item
Share of other comprehensive income of equity-accounted investments
Total of items that will not be reclassified (“recycled”) subsequently to
the income statement
Income taxes relating to items that may be reclassified (“recycled”)
subsequently to the income statement
Income taxes relating to items that will not be reclassified (“recycled”)
subsequently to the income statement
Total income taxes relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
thereof attributable to stockholders of the parent
thereof attributable to hybrid capital owners
thereof attributable to non-controlling interests
3, 6, 9
28
16
23
18
28
16
21
21
28
(87)
115
195
43
152
59
340
(734)
1,075
32
15
18
(161)
282
212
(114)
26
9
(3)
7
n.a.
n.a.
(10)
(82)
(3)
(52)
(3)
(55)
144
2,137
1,587
78
472
5
2
7
216
1,069
716
103
250
115
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
as of December 31, 2018
Assets
In EUR mn
Intangible assets
Property, plant and equipment
Equity-accounted investments
Other financial assets
Other assets
Deferred taxes
Non-current assets
Inventories
Trade receivables
Other financial assets
Income tax receivables
Other assets
Cash and cash equivalents
Current assets
Assets held for sale
Total assets
Note
2018
2017
14
15
16
18
19
25
17
18
18
19
26
20
3,317
15,115
3,011
2,659
36
759
24,896
1,571
3,420
2,727
9
264
4,026
12,017
47
36,961
2,648
13,654
2,913
1,959
55
744
21,972
1,503
2,503
1,140
15
265
3,972
9,398
206
31,576
116
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Equity and liabilities
In EUR mn
Share capital
Hybrid capital
Reserves
OMV equity of the parent 1
Non-controlling interests
Total equity
Provisions for pensions and similar obligations
Bonds
Other interest-bearing debts
Provisions for decommissioning and restoration obligations
Other provisions
Other financial liabilities
Other liabilities
Deferred taxes
Non-current liabilities
Trade payables
Bonds
Other interest-bearing debts
Income tax liabilities
Provisions for decommissioning and restoration obligations
Other provisions
Other financial liabilities
Other liabilities
Current liabilities
Liabilities associated with assets held for sale
Total equity and liabilities
Note
22
21
23
24
24
23
23
24
24
25
24
24
24
23
23
24
24
20
2018
327
1,987
9,591
11,905
3,436
15,342
1,096
4,468
441
3,673
446
924
138
731
11,917
4,401
539
304
349
63
355
2,806
863
9,680
2017
327
2,231
8,658
11,216
3,118
14,334
1,003
3,968
823
3,070
497
405
148
437
10,352
3,262
788
114
140
110
349
1,288
775
6,826
22
36,961
63
31,576
1 2017 included EUR 42 mn recognized in other comprehensive income and accumulated in equity related to Pakistan disposal group.
117
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity for 2018
Consolidated statement of changes in equity in 2018 1
In EUR mn
January 1, 2018
Adjustments on initial application of IFRS 9 and IFRS15
Adjusted balance January 1, 2018
Net income for the year
Other comprehensive income for the year
Total comprehensive income for the year
Capital increase
Dividend distribution and hybrid coupon
Changes in hybrid capital
Disposal of treasury shares
Share-based payments
Increase/(decrease) in non-controlling interest
Reclassification of cash flow hedges to balance sheet 2
December 31, 2018
Consolidated statement of changes in equity in 2017 1
In EUR mn
January 1, 2017
Net income for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividend distribution and hybrid coupon
Disposal of treasury shares
Share-based payments
December 31, 2017
Share
capital
Capital
reserves
Hybrid
capital
Revenue
reserves
Translation of
foreign opera-
tions
327
—
327
—
—
—
—
—
—
—
—
—
—
327
1,517
—
1,517
2,231
—
2,231
—
—
—
—
—
—
4
(11)
—
—
1,511
—
—
—
496
—
(741)
—
—
—
—
1,987
8,006
39
8,045
1,516
(87)
1,429
—
(576)
(60)
—
0
(8)
—
8,830
(838)
—
(838)
—
29
29
—
—
—
—
—
(0)
—
(809)
Share
capital
Capital
reserves
327
1,507
—
—
—
—
—
—
327
—
—
—
—
1
9
1,517
Hybrid
capital
2,231
—
—
—
—
—
—
2,231
Transla-
tion of
foreign
operations
Revenue
reserves
7,990
(1,251)
537
8
545
(529)
—
—
8,006
—
413
413
—
—
—
(838)
1 See Note 21
2 The amount was mainly related to inventories that were already consumed as of December 31, 2018 and consequently recognized in the income
statement.
3 2017 included EUR 42 mn recognized in other comprehensive income and accumulated in equity related to Pakistan disposal group.
118
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Share of other compr.
income of equity-ac-
counted investments
Hedges
Treasury shares
OMV equity of the
parent 3
Non-controlling
interests
Total equity
8
—
8
—
152
152
—
—
—
—
—
—
(122)
39
Hedges
(24)
—
32
32
—
—
—
8
(27)
3
(24)
—
55
55
—
—
—
—
—
—
(5)
26
(8)
—
(8)
—
—
—
—
—
—
3
—
—
—
(6)
11,216
42
11,259
1,516
149
1,665
496
(576)
(800)
7
(10)
(9)
(126)
11,905
3,118
0
3,118
477
(5)
472
—
(161)
—
—
—
7
0
3,436
14,334
42
14,377
1,993
144
2,137
496
(737)
(800)
7
(10)
(2)
(126)
15,342
Share of other
compr. income of
equity-accounted
investments
144
—
(171)
(171)
—
—
—
(27)
Treasury shares
OMV equity of the
parent 3
Non-controlling
interests
Total equity
(9)
—
—
—
—
1
—
(8)
10,915
537
282
819
(529)
2
9
11,216
3,010
315
(66)
250
(141)
—
—
3,118
13,925
853
216
1,069
(670)
2
9
14,334
119
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows for 2018
Consolidated statement of cash flows
In EUR mn
Net income for the year
Depreciation, amortization and impairments
Write-up of non-current assets
Deferred taxes
Current taxes
Income taxes paid
Tax refunds
Losses/(gains) from disposal of non-current assets and businesses
Income from equity-accounted investments and other dividend income
Dividends received from equity-accounted investments and other companies
Interest expense
Interest paid
Interest income
Interest received
Increase/(decrease) in personnel provisions
Increase/(decrease) in long-term provisions
Other changes
Sources of funds
Decrease/(increase) in inventories
Decrease/(increase) in receivables
Increase/(decrease) in liabilities
Increase/(decrease) in short-term provisions
Changes in net working capital components
Cash flow from operating activities
Investments
Intangible assets and property, plant and equipment
Investments, loans and other financial assets
Acquisitions of subsidiaries and businesses net of cash acquired
Disposals
Proceeds in relation to non-current assets
Proceeds from the sale of subsidiaries and businesses, net of cash disposed
Cash flow from investing activities
Increase in long-term borrowings
Repayments of long-term borrowings
Increase/(decrease) in short-term borrowings
Dividends paid to OMV equity holders
Dividends paid to non-controlling interests
Increase hybrid bond
Cash flow from financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Thereof cash disclosed within Assets held for sale
Cash and cash equivalents presented in the consolidated statement of finan-
cial position
Note
7
6
12
12
6, 9
6, 18, 31
11, 31
11, 31
23
23
26
17
18, 19
24
23
3, 14, 15
18
3
3
26
26
26
21
22
21
26
26
2018
1,993
1,886
(106)
298
1,007
(831)
2
(2)
(411)
437
131
(149)
(108)
44
(54)
62
93
4,293
(73)
(1,041)
1,287
(70)
103
4,396
(3,193)
(305)
(357)
60
442
(3,353)
1,011
(1,805)
102
(621)
(158)
496
(975)
(22)
45
3,981
4,026
—
2017
853
1,988
(47)
142
492
(551)
23
0
(525)
384
126
(149)
(55)
33
(35)
45
1,148
3,871
70
(51)
(347)
(96)
(424)
3,448
(1,586)
(366)
(1,644)
72
1,758
(1,766)
1,001
(217)
(89)
(529)
(140)
—
27
(42)
1,667
2,314
3,981
9
26
4,026
3,972
120
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
Basis of Preparation and Accounting Policies
1 Basis of preparation
OMV Aktiengesellschaft (registered in the Austrian
Register of Companies with its office based at
Trabrennstraße 6-8, 1020 Vienna, Austria), is an
integrated, international oil and gas company with
activities in Upstream and Downstream.
These financial statements have been prepared and
are in compliance with International Financial
Reporting Standards (IFRSs) as adopted by the EU
and in accordance with the supplementary account-
ing regulations pursuant to Sec. 245a, Para. 1 of the
Austrian Commercial Code (UGB). The financial year
corresponds to the calendar year.
The consolidated financial statements are in general
based on the historical cost principle, except for
certain items that have been measured at fair value
as described in Note 2 Accounting policies,
judgments and estimates.
The consolidated financial statements for 2018 have
been prepared in million EUR (EUR mn,
EUR 1,000,000). Accordingly, there may be round-
ing differences.
The consolidated financial statements comprise the
financial statements of OMV Aktiengesellschaft and
the entities it controls (its subsidiaries) as at
December 31, 2018. The financial statements of all
consolidated companies have the statement of
financial position date December 31, and are
prepared in accordance with uniform group-wide
accounting policies. A list of subsidiaries, equity-
accounted investments and other investments is
included under Note 38 including consolidation
method, business segment, place of business and
interest held by OMV.
The consolidated financial statements for 2018 were
approved by the Supervisory Board on
March 13, 2019.
2 Accounting policies, judgements and estimates
1) First-time adoption of new or amended
standards
The accounting policies adopted are consistent with
those of the previous financial year, except for the
changes as described below.
The Group has initially adopted IFRS 9 Financial
Instruments and IFRS 15 Revenue from Contracts
with Customers (incl. clarifications) from Janu-
ary 1, 2018. The effects of these standards are
described in the following chapters.
Additionally, the Group has adopted the following
amended standards with a date of initial application
of January 1, 2018:
► Amendments to IFRS 2 Classification and
Measurement of Share-based Payment
► Amendments to IFRS 4 Applying IFRS 9
Financial Instruments with IFRS 4 Insurance
► Annual Improvements to IFRS Standards 2014–
2016 Cycle (Amendments to IAS 28 and IFRS 1)
► IFRIC 22 Foreign Currency Transactions and
Advance Consideration
► Amendments to IAS 40 Transfers of Investment
Property
These amendments did not have a material impact
on the consolidated financial statements of the
Group.
2) IFRS 9 Financial instruments
IFRS 9 introduces key changes to the classification
and measurement of financial assets being based
on a business model and contractual cash flows
approach and implements a new impairment model
based on expected credit losses. In addition,
changes to hedge accounting have been made with
the objective to better represent the effect of risk
management activities that an entity adopts to
manage exposures.
Except for hedge accounting, IFRS 9 was applied
retrospectively. As permitted by IFRS 9, OMV did
not restate the figures of the comparative period.
The retrospective impact of applying IFRS 9 was
accounted for through adjustments to the opening
balances of the respective positions in equity as at
January 1, 2018.
IFRS 9 contains three principal classification
categories for financial assets: measured at
amortized cost, at fair value through other compre-
hensive income (FVOCI) and at fair value through
profit or loss (FVTPL).
121
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
The following table and the accompanying notes
below explain the original measurement categories
under IAS 39 and the new measurement categories
under IFRS 9 for each class of the Group’s financial
assets as at January 1, 2018.
Changes in measurement category from IAS 39 to IFRS 9
In EUR mn
Measurement category
Paragraph
Carrying amount
IAS 39
IFRS 9
Original
(IAS 39)
New
(IFRS 9)
Remeasure-
ment effect
Assets as at January 1,
2018
Equity-accounted
investments
Other investments
Investment funds
Bonds
Loans
Other financial assets
Derivative instruments:
a) Cash flow hedges
b) Other derivative
instruments
Trade receivables
n.a.
Available-for-sale
Available-for-sale
Available-for-sale
Loans and
receivables
Loans and
receivables 1
FVTPL
Available-for-sale
n.a.
FVOCI
FVTPL
Amortized cost
Amortized cost
Amortized cost 1
FVTPL
FVTPL
Fair value –
hedging
instrument
Held-for-trading
Loans and
receivables
Loans and
receivables
Fair value –
hedging
instrument
FVTPL
Amortized cost
FVTPL
1.
2.
3.
3.
4.
4.
4.
5.
2,913
39
6
78
2,916
82
6
78
348
345
1,019
641
139
1,015
641
139
97
97
732
732
2,306
2,304
197
197
3
43
—
(0)
(2)
(4)
—
—
—
—
(2)
—
1 Other financial assets include receivables for expenditure recoverable from Romanian state amounting to EUR 434 mn which are outside of scope of
IAS 39 and IFRS 9.
1. The carrying amount of equity-accounted
investments was increased by EUR 3 mn due to the
implementation of IFRS 9. The related impact net of
tax in OMV Group’s equity was EUR 3 mn.
2. IFRS 9 eliminates the exemption to measure
unquoted equity instruments at cost rather than at
fair value, in circumstances in which the range of
reasonable fair value measurements is significant
and the probabilities of the various estimates
cannot reasonably be assessed. It only allows
measurement at fair value and states indicators
when the cost might not be a good representative
of fair value. Under IFRS 9, OMV designated all
equity investments as measured at fair value
through OCI as they are held for long-term strategic
purposes. Consequently, all fair value gains and
losses are reported in OCI, no impairment losses
are recognized in profit or loss and no gains or
losses are reclassified to the income statement on
disposal. The related impact net of tax in OMV
Group’s equity was EUR 42 mn.
3. Available-for-sale financial assets, which include
mainly investment funds and debt instruments,
were recognized at fair value through OCI under
IAS 39. Upon application of IFRS 9 the investment
funds are measured at FVTPL. Based on the Group’s
assessment debt instruments previously classified
as available-for-sale financial assets, mainly
consisting of bonds, are held within the business
model with an objective to collect the contractual
cash flows. Upon application of IFRS 9 they are
therefore measured at amortized cost with an
adjustment to the accumulated OCI against their
carrying amount. The effect of both changes in OMV
Group’s equity is immaterial.
4. Financial assets measured at amortized cost are
subject to the new impairment provisions of IFRS 9
which require the recognition of impairment
122
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
provisions based on expected credit losses rather
than only incurred credit losses as was the case
under IAS 39. In general, the application of the
expected credit loss model results in earlier
recognition of credit losses and increase the
amount of loss allowance recognized for the
relevant items. The related impact net of tax in OMV
Group’s equity upon initial application of IFRS 9 is
EUR (6) mn.
5. Under IAS 39, all trade receivables were meas-
ured at amortized cost less any impairment. Upon
the application of IFRS 9, however, the portfolio of
receivables eligible for factoring or the securitiza-
tion program is measured at FVTPL as they are held
within a business model with an objective to sell
them. Moreover, the trade receivables from
arrangements with provisional pricing are also
measured at FVTPL as the contractual cash flows
are not solely payments of principal and interest on
the principal amount outstanding. The adjustment
to revenue reserves due to the new classification
under IFRS 9 is insignificant.
Reconciliation of changes in loss allowance based on measurement categories
In EUR mn
Measurement category
Loans and receivables/Financial assets at amortized cost
Trade receivables
Other sundry receivables and assets 1
Loans
Available for sale financial instruments/Financial assets
at amortized cost
Bonds
Total
Loss allowance
Remeasurement
due to IFRS 9
Adjusted loss
allowance
76
224
—
0
—
300
2
4
2
0
0
9
78
228
2
0
0
308
1 Loss allowance for Other sundry receivables and assets includes loss allowance for receivable for expenditure recoverable from Romanian state
amounting to EUR 8 mn which is outside of scope of IAS 39 and IFRS 9.
Under IFRS 9, generally more hedging instruments
and hedged items qualify for hedge accounting. The
Group’s hedging relationships qualified as continu-
ing hedges upon the adoption of IFRS 9. For cash
flow hedges of a forecast transaction that results in
the recognition of a non-financial item, the carrying
value of that item must be adjusted for the accumu-
lated gains or losses recognized directly in OCI
under IFRS 9. The adjustment will affect profit or
loss in the same manner and periods as the non-
financial items to which they relate affect profit or
loss. The accumulated gains and losses for these
cash flow hedges are presented within “Total items
that will not be reclassified (“recycled”) subse-
quently to the income statement” in the Statement
of comprehensive income and the adjustment of
the carrying value of the non-financial items is
presented as a change in the Statement of changes
in equity outside of the total comprehensive income
for the period. Under IAS 39 an accounting policy
choice was elected to maintain the cash flow hedge
reserves in equity and reclassify them to profit or
loss in the same period as the non-financial item
affects profit or loss.
3) IFRS 15 Revenue from contracts with
customers
IFRS 15 replaced the previous revenue recognition
requirements in IFRS and applies to all revenue
arising from contracts with customers. According to
the new standard, revenue is recognized to depict
the transfer of promised goods or services to a
customer in an amount that reflects the considera-
tion to which the Group expects to be entitled in
exchange for those goods or services. Revenue is
recognized when, or as, the customer obtains
control of the goods or services.
The Group has adopted the new standard on
January 1, 2018 using the modified retrospective
method, with the cumulated adjustment from
initially applying this standard recognized at
January 1, 2018. As a result, the Group has not
applied the requirements of IFRS 15 to the compar-
ative periods presented.
Under IFRS 15, there are more transactions in which
OMV acts in the capacity of an agent. An agent
recognizes revenue for the commission or fee
earned for facilitating the transfer of goods or
services. The assessment according to the new
standard is based on whether the Group controls
123
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
the specific goods or services before transferring to
the customer, rather than whether it has exposure
to significant risks and rewards associated with the
sale of the goods or services. Furthermore, under
IFRS 15 more transactions have to be considered as
non-monetary exchanges between entities in the
same line of business that do not qualify for
revenue recognition. Without this change due to
IFRS 15 sales revenues and related costs would
have been higher by EUR 270 mn, without any
impact on the margin.
In addition, there are a small number of long-term
supply contracts with different prices in different
periods where the rates do not reflect the value of
the goods at the time of delivery in the Group.
Whereas under IAS 18 the invoiced amount was
recognized as revenue, under IFRS 15 the revenue is
recognized based on the average contractual price.
Due to initial application of IFRS 15 retained
earnings at January 1, 2018 have been adjusted by
plus EUR 3 mn for these contracts.
The following table summarizes the impact of
adopting IFRS 15 on the consolidated income
statement and total comprehensive income for
2018. The impact of IFRS 15 on the group statement
of financial position and the group cash flow
statement was immaterial.
Income statement and Statement of comprehensive income for 2018
In EUR mn
Sales revenues
Other operating income
Total revenues and other income
Purchases (net of inventory variation)
Production and operating expenses
Selling, distribution and administrative expenses
Operating Result
Net financial result
Profit before tax
Taxes on income
Net income for the year
thereof attributable to stockholders of the parent
Total comprehensive income for the year
thereof attributable to stockholders of the parent
As reported
22,930
517
23,839
Adjustments
271
10
281
(14,094)
(1,594)
(1,749)
3,524
(226)
3,298
(1,305)
1,993
1,438
2,137
1,587
(178)
0
(101)
1
0
1
0
1
1
1
1
Balances
without
adoption of
IFRS 15
23,201
528
24,120
(14,272)
(1,593)
(1,850)
3,525
(226)
3,299
(1,305)
1,994
1,439
2,138
1,588
4) New or revised standards and interpretations
not yet mandatory
OMV has not applied the following new or revised
IFRSs and interpretations that have been issued but
are not yet effective. EU endorsement is still
pending in some cases.
a) IFRS 16 Leases
This standard will replace IAS 17 and sets out new
rules for lease accounting. For the lessee’s account-
ing, IFRS 16 will eliminate the classification of
leases as either operating leases or finance leases
as is required by IAS 17 and, instead, will introduce
a single lessee accounting model. Applying that
model, a lessee will be required to recognize assets
and liabilities for most leases and depreciation of
lease assets separately from interest on lease
liabilities in the income statement. For lessors, there
will only be minor changes compared to IAS 17.
The most significant impact is that the Group will
recognize new assets and liabilities for its operating
leases to which IFRS 16 is applicable. On transition
to IFRS 16, OMV intends to apply the practical
expedient to grandfather the assessment of which
transactions are leases. This means it applies IFRS
16 only to contracts that are previously identified as
leases. Contracts that were not identified leases
under the previous standard will not be reassessed
for whether they are leases. Leases to explore for
and use oil and natural gas, which comprise mainly
land leases used for such activities, are not in the
scope of IAS 17 and IFRS 16. Furthermore, OMV
considers subsurface rights of way which give OMV
the right to place underground pipelines where the
landowner retains the right to use the surface area
to not fulfill the definition of a lease under the
previous and new standard. In addition, some
commitments will be covered by the exceptions for
124
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
short-term and low-value leases. Consequently,
right-of-use assets and lease liabilities are not
recognized for these contracts. There is no signifi-
cant impact expected on the existing finance leases.
The recognition of a right-of-use asset and lease
liability for the operating leases is expected to lead
to an increase in property, plant and equipment and
debt of approximately EUR 700 mn on January 1,
2019. In the income statement, depreciation charges
and interest expense will be reported instead of
lease expense. This will lead to a slight increase in
operating result, which will be offset by higher
interest expense.
The estimated impact of the adoption of this
standard is based on the assessments undertaken
to date. The actual impacts may still change until the
Group presents its financial statements that include
the date of initial application.
OMV will initially apply IFRS 16 on January 1, 2019
using the modified retrospective approach for
transition, thus not restating comparative amounts
for the comparative period presented. The right-of-
use assets for previous operating leases will be
measured at the date of initial application at the
amount of the lease liability, adjusted by prepaid or
accrued lease payments. OMV will apply the various
practical expedients for transition. OMV will for
example not recognize any right-of-use assets and
lease liabilities for contracts which expire in 2019.
b) Other new or revised standards and
interpretations not yet mandatory
In addition, the following standards, interpretations
and amendments were issued which are not
expected to have any material effects on the
Group’s financial statements:
Standards, interpretations and amendments
IASB effective date
Amendments to IFRS 9 Prepayment Features with Negative Compensation
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures
Annual Improvements to IFRS Standards 2015-2017 Cycle (amendments to IFRS 3,
IFRS 11, IAS 12 and IAS 23)
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement
IFRIC 23 Uncertainty over Income Tax Treatments
Amendment to IFRS 3 Business Combinations
Amendments to IAS 1 and IAS 8 Definition of Material
Amendments to Conceptual Framework
IFRS 17 Insurance Contracts
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2020
January 1, 2020
January 1, 2020
January 1, 2021
5) Significant accounting policies, judgements
and assumptions
Use of estimates and judgements
Preparation of the consolidated financial state-
ments requires management to make estimates
and judgements that affect the amounts reported
for assets, liabilities, income and expenses, as
well as the amounts disclosed in the notes. These
estimates and assumptions are based on histori-
cal experience and other factors that are deemed
reasonable at the date of preparation of these
financial statements. Actual outcomes could
differ from these estimates. The estimates and
assumptions having the most significant impact
on OMV Group results are highlighted below and
should be read together with the relevant notes
mentioned. Significant estimates and assump-
tions have been made particularly with respect to
oil and gas reserves, provisions for decommis-
sioning and restoration costs, provisions for
onerous contracts and the recoverability of
intangible assets and property, plant and equip-
ment and other financial assets, which mainly
refer to the contractual position towards Gaz-
prom with regard to the reserves redetermination
of Yuzhno Russkoye field and the expenditure
recoverable from the Romanian State related to
decommissioning, restoration and environmental
obligations.
a) Business combinations and goodwill
Business combinations are accounted for using the
acquisition method. Assets and liabilities of
subsidiaries acquired are included at their fair value
at the time of acquisition. For each business
combination, the Group elects whether it measures
the non-controlling interest in the acquiree either at
fair value or at the proportionate share of the
acquiree’s identifiable net assets.
Any contingent consideration is measured at fair
value at the date of acquisition. Contingent consid-
eration classified as financial asset or liability is
125
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
subsequently measured at fair value with the
changes in fair value recognized in profit or loss.
Goodwill is calculated as the excess of the aggre-
gate of the consideration transferred, the amount
recognized for non-controlling interest and the fair
value of the equity previously held by OMV in the
acquired entity over the net identifiable assets
acquired and liabilities assumed. Goodwill is
recorded as an asset and tested for impairment at
least yearly. Impairments are recorded immediately
through profit or loss, subsequent write-ups are not
possible. Any gain on a bargain purchase is
recognized in profit or loss immediately.
b) Sales revenue
Revenue is generally recognized when control over
a product or a service is transferred to a customer. It
is measured based on the consideration specified in
a contract with a customer and excludes amounts
collected on behalf of third parties.
When goods such as crude oil, LNG, oil products
and similar goods are sold, the delivery of each
quantity unit normally represents a single perfor-
mance obligation. Revenue is recognized when
control of the goods has transferred to the custom-
er, which is the point in time when legal ownership
as well as the risk of loss has passed to the custom-
er and is determined on the basis of the Incoterm
agreed in the contract with the customer. These
sales are done with normal credit terms according
to the industry standard.
Revenue from the production of crude oil, in which
OMV has an interest with other producers, is
recognized according to the sales method. This
means that revenue is recognized based on the
actual sales to third parties, regardless of the
Group’s percentage interest or entitlement. An
adjustment of production costs is recognized at
average cost for the difference between the costs
associated with the output sold and the costs
incurred based on entitlement to output, with a
counter entry in the other assets or liabilities.
In the Downstream Oil retail business, revenues
from the sale of fuels are recognized when products
are supplied to the customers. Depending on
whether OMV is principal or agent in the sale of
shop merchandise, revenue and costs related to
such sales are presented gross or net in the income
statement. OMV is principal if it controls the goods
before they are transferred to the customer, which is
mainly indicated by OMV having the inventory risk.
At filling stations, payments are due immediately at
the time of purchase.
126
OMV’s gas and power supply contracts include a
single performance obligation which is satisfied
over the agreed delivery period. Revenue is
recognized according to the consumption by the
customer and in line with the amount to which OMV
has a right to invoice. Only in exceptional cases
long-term gas supply contracts contain stepped
prices in different periods where the rates do not
reflect the value of the goods at the time of delivery.
In these cases revenue is recognized based on the
average contractual price.
In some customer contracts for the delivery of
natural gas, the fees charged to the customer
comprise a fixed charge as well as a variable fee
depending on the volumes delivered. These
contracts contain only one performance obligation
which is to stand-ready for the delivery of gas over a
certain period. The revenue from the fixed charges
and the variable fees is recognized in line with the
amount chargeable to the customer. Gas and power
deliveries are billed and paid on a monthly basis.
Gas storage and gas transportation contracts
contain a stand-ready obligation for providing
storage or transportation services over an agreed
period of time. Revenue is recognized according to
the amount to which OMV has a right to invoice.
These services are billed and paid on a monthly
basis.
As OMV applied the cumulative effect method for
transition to IFRS 15, the comparative information
has not been restated and continues to be reported
under the previous revenue recognition standard
IAS 18. Differences between the revenue recogni-
tion according to IFRS 15 and IAS 18 are disclosed
in Section 3 of this note.
There are some customer contracts in OMV for the
delivery of oil and gas as well as for the provision of
gas storage and transportation services which have
a term of more than one year. In principle, IFRS 15
requires the disclosure of the total amount of
transactions prices allocated to unperformed
performance obligations for such contracts.
Contracts for the delivery of oil contain variable
prices based on market prices as at delivery date, as
it is common in the oil industry. For these contracts
it is, therefore, not possible to allocate the transac-
tion price to unsatisfied performance obligations.
For gas delivery and gas storage and transportation
contracts OMV applies the practical expedient
according to IFRS 15.121 (b) according to which this
information need not be disclosed for contracts
where revenue is recognized in the amount to which
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
the entity has a right to invoice. OMV, therefore,
does not disclose this information.
c) Other revenues
Sales and purchases of commodities are reported
net within other revenues when the forward sales
and purchase contracts are determined to be for
trading purposes and not for the final physical
delivery and therefore are in the scope of IFRS 9.
Other revenues also include an adjustment of
revenues from considering the national oil compa-
ny’s profit share as income tax in certain production
sharing agreements in the Upstream segment (see
2.5f), realized and unrealized results from hedging
of sales transactions as well as lease and rental
income.
d) Exploration expenses
Exploration expenses relate exclusively to the
business segment Upstream and comprise the
costs associated with unproved reserves. These
include geological and geophysical costs for the
identification and investigation of areas with
possible oil and gas reserves and administrative,
legal and consulting costs in connection with
exploration. They also include all impairments on
exploration wells where no proved reserves could
be demonstrated. Depreciation of economically
successful exploration wells is reported as deprecia-
tion, amortization and impairment charges.
e) Research and development
Expenditure related to research activities is recog-
nized as expense in the period in which it is
incurred. Research and development (R&D)
expenses, which are presented in the income
statement within other operating expenses, include
all direct and indirect materials, personnel and
external services costs incurred in connection with
the focused search for new insights related to the
development and significant improvement of
products, services and processes and in connection
with research activities. Development costs are
capitalized if the recognition criteria according to
IAS 38 are fulfilled.
f) Exploration and production sharing agreements
Exploration and production sharing agreements
(EPSAs) are contracts for oil and gas licenses in
which the oil or gas production is shared between
one or more oil companies and the host coun-
try/national oil company in defined proportions.
Exploration expenditures are carried by the oil
companies as a rule and recovered from the state or
the national oil company through so called “cost
oil” in a successful case only. Under certain EPSA
contracts the host country’s/national oil company’s
profit share represents imposed income taxes and
is treated as such for purposes of the income
statement presentation.
g) Intangible assets and property, plant and
equipment
Intangible assets and property, plant and equipment
are recognized at costs of acquisition or construc-
tion (including costs of major inspection and
general overhauls). The present value of the
expected cost for the decommissioning of an asset
after its use is included in the cost of the respective
asset when a decommissioning provision is
recognized (see 2.5s). Costs for replacements of
components are capitalized and carrying values of
the replaced parts are derecognized. Costs relating
to minor maintenance and repairs are treated as
expenses in the year in which they are incurred.
Intangible assets and depreciable property, plant
and equipment (except for oil and gas assets and a
contract-related intangible asset in Upstream, see
2.5h) are amortized or depreciated on a straight-line
basis over the useful economic life.
127
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Useful life
Intangible assets
Goodwill
Software
Concessions, licenses, contract-related intangible assets etc.
Business-specific property, plant and equipment
Downstream Oil
Upstream
Downstream Gas
Oil and gas wells
Gas pipelines
Gas power plants
Storage tanks
Refinery facilities
Pipeline systems
Filling stations
Other property, plant and equipment
Production and office buildings
Other technical plant and equipment
Fixtures and fittings
h) Oil and gas assets
Upstream activities are recorded using the success-
ful efforts method. The acquisition costs of geologi-
cal and geophysical studies before the discovery of
proved reserves form part of expenses for the
period. The costs of wells are capitalized and
reported as intangible assets until the existence or
absence of potentially commercially viable oil or
gas reserves is determined. Wells which are not
commercially viable are expensed. The costs of
exploration wells whose commercial viability has
not yet been determined continue to be capitalized
as long as the following conditions are satisfied:
► Sufficient oil and gas reserves have been
discovered that would justify completion as a
production well.
► Sufficient progress is being made in assessing
the economic and technical feasibility to justify
beginning field development in the near future.
Exploratory wells in progress at year end which are
determined to be unsuccessful subsequent to the
statement of financial position date are treated as
non-adjusting events, meaning that the costs
incurred for such exploratory wells remain capital-
ized in the financial statements of the reporting
period under review and will be expensed in the
subsequent period. Information on such non-
adjusting subsequent events after the statement of
financial position date is disclosed in Note 37.
License acquisition costs and capitalized exploration
and appraisal activities are generally not amortized
as long as they are related to unproved reserves,
128
Years
Indefinite
3–5
5–20, contract duration or unit-of
production method
Unit-of-production method
30
8–30
40
25
20
5–20
20–50
10–20
4–10
but tested for impairment. Once the reserves are
proved and commercial viability is established, the
related assets are reclassified into tangible assets.
Development expenditure on the construction,
installation or completion of infrastructure facilities
such as platforms and pipelines and drilling
development wells is capitalized within tangible
assets. Once production starts, depreciation
commences. Capitalized exploration and develop-
ment costs and support equipment are generally
depreciated based on proved developed reserves
by applying the unit-of-production method; only
capitalized exploration rights and acquired reserves
are amortized on the basis of total proved reserves,
unless a different reserves basis is more adequate.
Significant estimate: oil and gas reserves
OMV Group’s oil and gas reserves are estimated
by the Group’s petroleum engineers in accord-
ance with industry standards. In addition, exter-
nal reviews are performed every two years. In
2018, DeGolyer and MacNaughton (D&M) re-
viewed the reserves as of December 31, 2017. The
results of the external review did not show
significant deviations from the internal estimates,
except for one case. In order to obtain a reason-
able assurance on the reserves numbers of the
field with a material deviation to D&M, OMV
engaged an independent external specialist to
provide an opinion on OMV’s approach for
determining the reserves, which was deemed
appropriate.
Proved reserves are those quantities of oil and
gas, which, by analysis of geoscience and engi-
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
neering data, can be estimated with reasonable
certainty to be economically producible from a
given date forward, from known reservoirs, and
under existing economic conditions, operating
methods, and government regulation before the
time at which the contracts providing the right to
operate expire, unless evidence indicates that
renewal is reasonably certain.
Proved oil and gas reserves were estimated
based on a 12-month average price, unless prices
are defined by contractual arrangements.
The reserves are reassessed by the group at least
once per year. Changes to the estimates of
proved oil and gas reserves impact prospectively
the amount of depletion charged.
Oil and gas reserve estimates have a significant
impact on the assessment of recoverability of
carrying amounts of oil and gas assets of the
Group. Downward revisions of these estimates
could lead to impairment of the asset’s carrying
value and to reduced depreciation expense in the
next period.
i) Impairment of non-financial assets
Intangible assets and property, plant and equipment
(including oil and gas assets) are tested for impair-
ment whenever events or changes in circumstances
indicate that an asset may be impaired. Impairment
tests are performed on the level of cash generating
units which generate cash inflows that are largely
independent of those from other assets or groups of
assets.
If assets are determined to be impaired, the carrying
amounts are written down to their recoverable
amount, which is the higher of fair value less costs
of disposal or value in use.
In assessing value in use, the estimated future cash
flows are discounted to their present value using a
post-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset or CGU. The pre-tax
discount rate is determined by way of iteration. The
cash flows are generally derived from the recent
budgets and planning calculations, which are
prepared separately for each of the Group’s CGUs
to which the individual assets are allocated.
The fair value less costs of disposal is determined
on the basis of the recent market transactions, if
available. If no such transactions can be identified,
an appropriate valuation model is used.
If the reasons for impairment no longer apply in a
subsequent period, a reversal is recognized in profit
or loss. The increased carrying amount related to
the reversal of an impairment loss shall not exceed
the carrying amount that would have been deter-
mined (net of amortization and depreciation) had no
impairment loss been recognized in prior years.
Significant estimates and judgements:
recoverability of unproved oil and gas assets
There may be cases when costs related to
unproved oil and gas properties remain capital-
ized over longer periods while various appraisal
and seismic activities continue in order to assess
the size of the reservoir and its commerciality.
Further decisions on the optimum timing of such
developments are made from a resource and
portfolio point of view. As soon as there is no
further intention to develop the discovery, the
assets are immediately impaired.
Significant estimates and judgements:
recoverability of intangible assets and property,
plant and equipment
Evaluating whether assets or CGUs are impaired
or whether past impairments should be reversed,
require the use of different estimates and as-
sumptions depending on the business such as oil
and gas prices, inflation, discount rates, reserves,
production profiles, growth rates, gross margins
and spark spreads. The key estimates and as-
sumptions used bear the risk of change due to
the inherent volatile nature of the various macro-
economic factors and the uncertainty in asset or
CGU specific factors like reserve volumes and
production profiles, which can impact the recov-
erable amount of assets and/or CGUs.
The key valuation assumptions for the recovera-
ble amounts of Upstream assets are the oil and
natural gas prices, production volumes, ex-
change rates and the discount rates. The produc-
tion profiles were estimated based on past
experience and represent management’s best
estimate of future production. The cash flow
projections for the first five years are based on
the mid-term plan and thereafter on a “life of
field” planning and therefore cover the whole life
term of the field.
The nominal oil and gas price assumptions and
the EUR-USD exchange rates are listed below:
129
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
2018
Brent oil price (USD/bbl)
EUR-USD exchange rate
Brent oil price (EUR/bbl)
CEGH gas price (EUR/MWh)
2017
Brent oil price (USD/bbl)
EUR-USD exchange rate
Brent oil price (EUR/bbl)
CEGH gas price (EUR/MWh)
The long-term price assumptions from 2024
onwards are derived from USD 75 per barrel for
Brent and EUR 20 per MWh for CEGH inflated for
the remaining life of each asset. The assumptions
used for oil and gas prices for short and medium
term are based on management’s best estimate
and were consistent with external sources. The
long-term assumptions were consistent with data
provided by external studies and consider long-
term views of global supply and demand.
In the Downstream Oil business, besides the
discount rates, the recoverable amounts are
mainly impacted by the indicator refinery margin
and the utilization rate in the refineries and by
the integrated margin and sales volumes in retail.
In the Downstream Gas business, besides the
discount rates, the main valuation assumptions
for the calculation of the recoverable amounts
are the spark spreads for power plants and the
summer/winter spreads for gas storages.
j) Assets held for sale
Non-current assets and disposal groups are
classified as held for sale if their carrying amounts
are to be realized by sale rather than through
continued use. This is the case when the sale is
highly probable, and the asset or disposal group is
available for immediate sale in its present condition.
Non-current assets and disposal groups classified
as held for sale are measured at the lower of
carrying amount and fair value less costs to sell.
Property, plant and equipment and intangible assets
once classified as held for sale are no longer
amortized or depreciated.
130
2019
70
1.20
58
20
2018
55
1.15
48
18
2020
70
1.20
58
20
2019
65
1.15
57
19
2021
75
1.20
63
20
2020
70
1.15
61
20
2022
75
1.20
63
20
2021
75
1.15
65
20
2023
75
1.20
63
20
2022
75
1.15
65
20
k) Leases
The Group holds a number of assets for its various
activities under lease contracts. These leases are
analyzed based on the situations and indicators set
out in IAS 17 in order to determine whether they
constitute operating leases or finance leases. A
finance lease is defined as a lease which transfers
substantially all the risks and rewards incidental to
the ownership of the related asset to the lessee. All
leases which do not meet the definition of a finance
lease are classified as operating leases.
Finance leases are capitalized at the lower of the
present value of the minimum lease payments or
fair value and then depreciated over their expected
useful lives or the duration of the lease, if shorter. A
liability equivalent to the capitalized amount is
recognized, and future lease payments are split into
the finance charge and the capital repayment
element.
In the case of operating leases, lease payments are
recognized on a straight-line basis over the lease
term.
Lease contracts are distinguished from service
contracts, which do not convey the right to use a
specific asset. OMV has entered into long-term
contracts for storage capacities, pipeline and other
transportation capacities, and contracts for pro-
cessing goods. Such capacity contracts are not
considered leases if they do not involve specified
single assets or do not convey the right to control
the use of the underlying assets. Payments for such
contracts are expensed in the period for which the
capacities are contractually available to OMV.
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
l) Associated companies and joint arrangements
Associated companies are those entities in which
the Group has significant influence, but not control
nor joint control over the financial and operating
policies. Joint arrangements, which are arrange-
ments of which the Group has joint control together
with one or more parties, are classified into joint
ventures or joint operations. Joint ventures are joint
arrangements in which the parties that share control
have rights to the net assets of the arrangement.
Joint operations are joint arrangements in which the
parties that share joint control have rights to the
assets, and obligations for the liabilities, relating to
the arrangement.
Investments in associated companies and joint
ventures are accounted for using the equity
method, under which the investment is initially
recognized at cost and subsequently adjusted for
the Group’s share of the profit or loss less dividends
received and the Group’s share of other compre-
hensive income and other movements in equity.
At each statement of financial position date,
investments in associates and joint ventures are
reviewed for any objective evidence of impairment.
If there is such evidence, the amount of impairment
is calculated as the difference between the recover-
able amount of the associate or joint venture and its
carrying amount and recognized in profit and loss.
Significant joint exploration and production
activities in the Upstream segment are conducted
through joint operations which are not structured
through a separate vehicle. For these joint opera-
tions, OMV recognizes in the consolidated financial
statements its share of the assets held and liabilities
and expenses incurred jointly with the other
partners, as well as the group’s income from the
sale of its share of the output and any liabilities and
expenses that the group has incurred in relation to
the joint operation. Acquisitions of interests in a
joint operation, in which the activity of the joint
operation constitutes a business, are accounted for
according to the relevant IFRS 3 principles for
business combination accounting (see 2.5a).
In addition, there are contractual arrangements
similar to joint operations in the Group which are
not jointly controlled and therefore do not meet the
definition of a joint operation according to IFRS 11.
This is the case when the main decisions can be
taken by more than one combination of affirmative
votes of the involved parties or where one other
party has control. OMV assesses whether such
arrangements are within or out of scope of IFRS 11
on the basis of the relevant legal arrangements such
as concession, license or joint operating agree-
ments which define how and by whom the relevant
decisions for these activities are taken. The account-
ing treatment for these arrangements is basically
the same as for joint operations. As acquisitions of
interests in such arrangements are not within the
scope of IFRS 3, OMV’s accounting policy is to treat
such transactions as asset acquisitions.
m) Non-derivative financial assets
At initial recognition, OMV classifies its financial
assets as subsequently measured at amortized cost,
fair value through other comprehensive income
(OCI) or fair value through profit or loss. The
classification depends both on the Group’s business
model for managing the financial assets and the
contractual cash flow characteristics of the financial
assets. All regular way trades are recognized and
derecognized on the trade date, i.e., the date that
the Group commits to purchase or sell the asset.
Debt instruments are measured at amortized cost if
both of the following conditions are met:
► the asset is held within the business model
whose objective is to hold assets in order to
collect contractual cash flows; and
► the contractual terms of the financial asset give
rise on specific dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.
These assets are subsequently measured at
amortized cost using the effective interest method
less any impairment losses. Interest income,
impairment losses and gains or losses on derecog-
nition are recognized in profit or loss.
OMV recognizes allowances for expected credit
losses (ECLs) for all financial assets measured at
amortized costs. The ECL calculation is based on
external or internal credit ratings of the counterpar-
ty and associated probabilities of default. Available
forward-looking information is taken into account, if
it has a material impact on the amount of valuation
allowance recognized.
ECLs are recognized in two stages. Where there has
not been a significant increase in the credit risk
since initial recognition, credit losses are measured
at 12 month ECLs. The 12 month ECL is the credit
loss which results from default events that are
possible within the next 12 months. The Group
considers a financial asset to have low credit risk
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OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
when its credit risk rating is equivalent to the
definition of ‘investment grade’.
Where there has been a significant increase in the
credit risk since initial recognition, a loss allowance
is required for the lifetime ECL, i.e. the expected
credit losses resulting from possible default events
over the expected life of a financial asset. For this
assessment, OMV considers all reasonable and
supportable information that is available without
undue cost or effort. Furthermore, OMV assumes
that the credit risk on a financial asset has signifi-
cantly increased if it is more than 30 days past due.
If the credit quality improves for a lifetime ECL
asset, OMV reverts to recognizing allowances on a
12 month ECL basis. A financial asset is considered
to be in default when the financial asset is 90 days
past due unless there is reasonable and supportable
information that demonstrate that a more lagging
default criterion is appropriate. A financial asset is
written off when there is no reasonable expectation
that the contractual cash flows will be recovered.
For trade receivables and contract assets from
contracts with customers a simplified approach is
adopted, where the impairment losses are recog-
nized at an amount equal to lifetime expected credit
losses. In case there are credit insurances or
securities held against the balances outstanding,
the ECL calculation is based on the probability of
default of the insurer/securer for the in-
sured/secured element of the outstanding balance
and the remaining amount will take the probability
of default of the counterparty.
Non-derivative financial assets classified as at fair
value through profit or loss include trade receiva-
bles from sales contracts with provisional pricing
and investment funds because the contractual cash
flows do not represent solely payments of principal
and interest on the principal amount outstanding.
Furthermore, this measurement category includes
portfolios of trade receivables held with an intention
to sell them. These assets are measured at fair
value, with any gains or losses arising on remeas-
urement recognized in profit or loss.
Equity instruments may be elected irrevocably as
measured at fair value through OCI if they are not
held for trading. OMV elected to classify its non-
listed equity investments which are held for
strategic purposes under this category. Gains and
losses on equity investments measured at FVOCI
are never recycled to profit or loss and they are not
subject to impairment assessment. Dividends are
recognized in profit or loss unless they represent a
recovery of part of the cost of an investment.
OMV derecognizes a financial asset when the
contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to another party.
The classification and measurement provisions of
IFRS 9 were applied retrospectively without
restating the figures of the comparative period,
which continue to be reported under the previous
accounting standard for financial instruments IAS
39. Differences between the classification and
measurement according to IFRS 9 and IAS 39 are
disclosed in Section 2 of this note.
Significant estimates and judgements: Fair
value and recoverability of financial assets
The management is periodically assessing the
receivable related to expenditure recoverable
from the Romanian State related to obligations
for decommissioning and restoration costs in
OMV Petrom SA. The assessment process is
considering inter alia the history of amounts
claimed, documentation process related re-
quirements, potential litigation or arbitration
proceedings.
In 2017, as part of the acquisition of the interest in
Yuzhno Russkoye gas field, OMV took over a
contractual position towards Gazprom with
regard to the reserves redetermination. The
volume of gas reserves in Yuzhno Russkoye field
is contractually agreed and, in case the reserves
are higher or lower than what was assumed in
the agreement, either OMV could be obligated to
compensate Gazprom (but would profit in the
future from higher sales volumes) or Gazprom
could be obligated to compensate OMV. The
payment for the reserve redetermination is linked
to the actual amount of the gas reserves. The
actual volume of gas reserves in Yuzhno Russko-
ye is expected to be agreed in 2023. The estimat-
ed volume of gas reserves in the field is assumed
by OMV to be lower than the contractually
agreed volume and is based on the assessment
of the Group’s petroleum engineers (see Note 18
for more details).
n) Derivative financial instruments and hedges
Derivative instruments are used to hedge risks
resulting from changes in currency exchange rates
and commodity prices. Derivative instruments are
recognized at fair value. Unrealized gains and losses
are recognized as income or expense, except where
hedge accounting is applied.
132
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Those derivatives qualifying and designated as
hedges are either (i) a fair value hedge when
hedging exposure to changes in the fair value of a
recognized asset or liability or (ii) a cash flow hedge
when hedging exposure to variability in cash flows
that is attributable to a particular risk associated
with a recognized asset or liability or a highly
probable forecast transaction.
For cash flow hedges, the effective part of the
changes in fair value is recognized in other compre-
hensive income, while the ineffective part is
recognized immediately in the income statement.
Where the hedging of cash flows results in the
recognition of a non-financial asset or liability, the
carrying value of that item will be adjusted for the
accumulated gains or losses recognized directly in
OCI.
The hedge accounting provisions according to IFRS
9 were applied prospectively without restating the
figures of the comparative period, which continue
to be reported under the previous standard IAS 39.
Differences between the hedge accounting re-
quirements according to IFRS 9 and IAS 39 are
disclosed in Section 2 of this note.
Contracts to buy or sell a non-financial item that can
be settled net in cash or another financial instru-
ment, or by exchanging financial instruments, as if
the contracts were financial instruments, are
accounted for as financial instruments and meas-
ured at fair value. Associated gains or losses are
recognized in profit or loss. However, contracts that
are entered into and continue to be held for the
purpose of the receipt or delivery of a non-financial
item in accordance with the Group’s expected
purchase, sale or usage requirements are not
accounted for as derivative financial instruments,
but rather as executory contracts.
o) Borrowing costs
Borrowing costs directly attributable to the acquisi-
tion, construction or production of qualified assets
are capitalized until these assets are substantially
ready for their intended use or sale. All other costs
of borrowing are expensed in the period in which
they are incurred.
p) Government grants
Government grants are recognized as income or
deducted from the related asset where it is reason-
able to expect that the granting conditions will be
met and that the grants will be received.
q) Inventories
Inventories are recognized at the lower of cost and
net realizable value using the average price method
for acquisition or production or the individual costs
for not interchangeable goods respectively. Costs of
production comprise directly attributable costs as
well as fixed and variable indirect material and
production overhead costs. Production-related
administrative costs, the costs of company pension
schemes and voluntary employee benefits are also
included. In refineries, a carrying capacity approach
is applied according to which the production costs
are allocated to product groups on the basis of their
relative market values at the end of the period.
A special accounting treatment is applied to
inventories held according to compulsory stock
obligations in Austria. The additional quantities in
crude oil and products held under the Austrian Oil
Stockholding Act (2013) are valued using a long-
term weighted average price method, applied on
the basis of oil equivalents. Quantities exceeding
the compulsory stocks are valued at the lower of
current production or acquisition costs and the net
realizable value.
r) Cash and cash equivalents
Cash and cash equivalents include cash balances,
bank accounts and highly liquid short-term invest-
ments with low realization risk, i.e. negligible short-
term exchange and interest risks. The maximum
maturity at the time of acquisition for such invest-
ments is three months.
s) Provisions
A provision is recorded for present obligations
against third parties when it is probable that an
obligation will occur and the settlement amount can
be estimated reliably. Provisions for individual
obligations are based on the best estimate of the
amount necessary to settle the obligation, discount-
ed to the present value in the case of long-term
obligations.
Decommissioning and environmental obligations:
The Group’s core activities regularly lead to
obligations related to dismantling and removal,
asset retirement and soil remediation activities.
These decommissioning and restoration obligations
are principally of material importance in the
Upstream segment (oil and gas wells, surface
facilities) and in connection with filling stations on
third-party property. At the time the obligation
arises, it is provided for in full by recognizing the
present value of future decommissioning and
restoration expenses as a liability. An equivalent
amount is capitalized as part of the carrying amount
133
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
of long-lived assets. Any such obligation is calculat-
ed on the basis of best estimates. The unwinding of
discounting leads to interest expense and accord-
ingly to increased obligations at each statement of
financial position date until decommissioning or
restoration. For other environmental risks and
measures, provisions are recognized if such
obligations are probable and the amount of the
obligation can be estimated reliably.
Significant estimates and judgements:
decommissioning provisions
The most significant decommissioning obliga-
tions of the Group are related to plugging of
wells, the abandonment of facilities and the
removal and disposal of offshore installations.
The majority of these activities are planned to
occur many years into the future, while decom-
missioning technologies, costs, regulations and
public expectations are constantly changing.
Estimates of future restoration costs are based
on reports prepared by Group engineers and on
past experience. Any significant downward
changes in the expected future costs or post-
ponement in the future affect both the provision
and the related asset, to the extent that there is
sufficient carrying amount, otherwise the provi-
sion is reversed to income. Significant upward
revisions trigger the assessment of the recovera-
bility of the underlying asset.
Provisions for decommissioning and restoration
costs require estimates of discount rates, which
have material effects on the amounts of the
provision. The real discount rates applied for
calculating the provision for decommissioning
and restoration costs were between 0.0% and
3.0% (2017: 0.0% and 3.0%).
Pensions and similar obligations: OMV has both
defined contribution and defined benefit pension
plans in Austria and Germany and defined benefit
pension plans New Zealand. In the case of defined
contribution plans, OMV has no obligations beyond
payment of the agreed premiums, and no provision
is therefore recognized. The reported expense
corresponds to the contributions payable for the
period.
In contrast, participants in defined benefit plans are
entitled to pensions at certain levels and are
generally based on years of service and the
employee’s average compensation over the last five
calendar years of employment. These defined
benefit plans expose the Group to actuarial risks,
134
such as longevity risk, interest rate risk, inflation risk
(as a result of indexation of pension) and market
risk Defined benefit pension obligations are
accounted for by recognizing provisions for
pensions.
Employees of Austrian Group companies whose
service began before December 31, 2002 are
entitled to receive severance payments upon
termination of employment or on reaching normal
retirement age. The entitlements depend on years of
service and final compensation levels. Entitlements
to severance payments for employees whose
service began after December 31, 2002 are covered
by defined contribution plans. Similar obligations as
entitlement to severance payments also exist in
other countries, where the Group provides em-
ployment.
Employees in Austria and Germany are entitled to
jubilee payments after completion of a given
number of years of service. These plans are non-
contributory and unfunded.
Provisions for pensions, severance payments and
jubilee payments are calculated using the projected
unit credit method, which divides the costs of the
estimated benefit entitlements over the whole
period of employment and thus takes future
increases in remuneration into account. Actuarial
gains and losses for defined benefit pension and
severance payment obligations are recognized in
full in the period in which they occur in other
comprehensive income. Such actuarial gains and
losses are not reclassified to profit or loss in
subsequent periods. Actuarial gains and losses on
obligations for jubilee payments are recognized in
profit or loss. Net interest expense is calculated on
the basis of the net defined benefit obligation and
disclosed as part of the financial result. Differences
between the return on plan assets and interest
income on plan assets included in the net interest
expense is recognized in other comprehensive
income.
Provisions for voluntary and mandatory separations
under restructuring programs are recognized if a
detailed plan has been approved by management
and communicated to those affected prior to the
statement of financial position date and an irrevo-
cable commitment is thereby established. Voluntary
modifications to employees’ remuneration arrange-
ments are recognized on the basis of the expected
number of employees accepting the employing
company’s offer. Provisions for obligations related
to individual separation agreements which lead to
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
fixed payments over a defined period of time are
recognized at the present value of the obligation.
Significant estimates and judgements: pensions
and similar obligations
The projected unit credit method calculation of
provisions for pensions, severance and jubilee
entitlements requires estimates for discount
rates, future increases in salaries and future
increases in pensions. For current actuarial
assumptions for calculating expected defined
benefit entitlements and their sensitivity analysis
see Note 23.
The biometrical basis for the calculation of
provisions for pensions, severance and jubilee
entitlements of Austrian Group companies is
provided by AVÖ 2018 P – Rechnungsgrundlagen
für die Pensionsversicherung (Biometric Tables
for Pension Insurance) – Pagler & Pagler, using
the variant for salaried employees. In other
countries, similar actuarial parameters are used.
Employee turnover was computed based on age
or years of service respectively. The expected
retirement age used for calculations is based on
the relevant country’s legislation.
Provisions for onerous contracts: If onerous
contracts exist in which the unavoidable costs of
meeting a contractual obligation exceed the
economic benefits expected to be received under
the contract, provisions are recognized at the lower
amount of the cost of fulfilling the contract and any
potential penalties or compensation arising in the
event of non-performance.
Significant estimates and judgements: provi-
sions for onerous contracts
OMV concluded in the past several long-term,
non-cancellable contracts that became onerous
due to negative development of market condi-
tions. This led to the recognition of onerous
contract provisions in the Group’s financial
statements for the unavoidable costs of meeting
the contract obligations.
The estimates used for calculating the positive
contributions that partly cover the fixed costs
were based on external sources and manage-
ment expectations. For more details on the
significant provisions see Note 23.
Emission allowances received free of cost from
governmental authorities (EU Emissions Trading
Scheme for greenhouse gas emissions allowances)
reduce financial obligations related to CO2 emis-
sions; provisions are recognized only for shortfalls
(see Note 23).
t) Non-derivative financial liabilities
Liabilities are carried at amortized cost, with the
exception of derivative financial instruments, which
are recognized at fair value. Long-term liabilities are
discounted using the effective interest rate method.
u) Taxes on income including deferred taxes
In addition to corporate income taxes and trade
earnings taxes, typical upstream taxes from oil and
gas production like the country’s/national oil
company’s profit share for certain EPSAs (see 4.5f)
are disclosed as income taxes. Deferred taxes are
recognized for temporary differences.
Deferred tax assets are recognized to the extent that
it is probable that taxable profit will be available
against which the unused tax losses, unused tax
credits and deductible temporary differences can be
utilized.
Significant estimates and judgements: Recover-
ability of deferred tax assets
The recognition of deferred tax assets requires
an assessment of when those assets are likely
to reverse, and a judgement as to whether or
not there will be sufficient taxable profits
available to offset the assets when they reverse.
This assessment of recoverability requires
assumptions regarding future profits and is
therefore uncertain. In OMV, this assessment is
based on detailed tax plannings which covers in
Upstream entities the whole life of field and a
five year period in the other entities.
Changes in the assumptions regarding future
profits can lead to an increase or decrease of
the amount of deferred tax assets recognized
which has an impact on the net income in the
period in which the change occurs.
Deferred tax assets and liabilities at Group level are
shown net where there is a right of set-off and the
taxes relate to matters subject to the same tax
jurisdiction.
135
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
v) Long Term Incentive (LTI) plans and Equity
Deferral
The fair value of share-based compensation
expense arising from the Long-term Incentive Plan
(LTIP) – OMV’s main equity settled plan – is estimat-
ed using a model which is based on the expected
target achievements and the expected share prices.
For cash-settled awards, a provision based on the
fair value of the amount payable is built up over the
vesting period, so that by the end of the vesting
period the fair value of the bonus shares to be
granted is fully provided for. The provision is
remeasured at the end of each reporting period up
to the date of settlement, with any changes in fair
value recognized in profit or loss. For share settled
awards, the grant date fair value is recognized as an
expense (including income tax), with a correspond-
ing increase in equity, over the vesting period of the
awards. The amount recognized as expense is
adjusted to subsequent changes in parameters
other than market parameters. In addition, the
Equity Deferral part of the annual bonus is settled in
shares. Accordingly, the related expense is recog-
nized against equity. For share-based awards, the
award is settled net of tax to the participants.
w) Fair value measurement
The fair value is the amount for which an asset or
liability could be transferred at the measurement
date, based on the assumption that such transfers
take place between participants in principal markets
and, where applicable, taking highest and best use
into account.
Fair values are determined according to the
following hierarchy:
Level 1: Quoted prices in active markets for identical
assets or liabilities. For OMV Group this
category will, in most cases, only be rele-
vant for securities, bonds, investment funds
and futures contracts.
Level 2: Valuation technique using directly or
indirectly observables inputs. In order to
determine the fair value for financial in-
struments within Level 2, usually forward
prices of crude oil or natural gas, interest
rates and foreign exchange rates are used
as inputs to the valuation model. In addition
counterparty credit risk as well as volatility
indicators, if applicable, are taken into ac-
count.
Level 3: Valuation techniques such as discounted
cash flow models using significant unob-
servable inputs (e.g. long-term price as-
sumptions and reserves estimates).
6) Foreign currency translation
Monetary foreign currency balances are measured
at closing rates, and exchange gains and losses
accrued at statement of financial position date are
recognized in the income statement.
The financial statements of Group companies with
functional currencies different from the Group’s
presentation currency are translated using the
closing rate method. Differences arising from
statement of financial position items translated at
closing rates are disclosed in other comprehensive
income. Income statement items are translated at
average rates for the period. The use of average
rates for the income statement creates additional
differences compared to the application of the
closing rates in the statement of financial position
which are directly adjusted in other comprehensive
income.
The main rates applied in translating currencies to
EUR were as follows:
136
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Foreign currency translation
Australian dollar (AUD)
Bulgarian lev (BGN)
Czech crown (CZK)
Hungarian forint (HUF)
New Zealand dollar (NZD)
Norwegian krone (NOK)
Romanian leu (RON)
Russian ruble (RUB)
Turkish lira (TRY)
US dollar (USD)
3 Changes in group structure
2018
2017
Statement of
financial
position date
1.622
1.956
25.724
320.980
1.706
9.948
4.664
79.715
6.059
1.145
Average
1.580
1.956
25.647
318.890
1.707
9.598
4.654
74.042
5.708
1.181
Statement of
financial
position date
1.535
1.956
25.535
310.330
1.685
9.840
4.659
69.392
4.546
1.199
Average
1.473
1.956
26.326
309.193
1.590
9.327
4.569
65.938
4.121
1.130
Changes in consolidated Group – Upstream
On December 28, 2018, OMV completed the
acquisition of Shell’s Upstream business in New
Zealand comprising interests in Pohokura (48%), the
largest gas producing field in New Zealand, and
Maui (83.75%) as well as related infrastructure for
production, storage and transportation. OMV has
been partner in the acquired assets (OMV’s former
stakes: 26% in Pohokura and 10% in Maui) and
following the acquisition assumed operatorship in
both joint operations. The acquisition was an
important step to develop Asia-Pacific into a core
region in line with OMV’s strategy and added up to
100 mn boe of recoverable resources to the
Upstream portfolio.
The purchase price paid by OMV to Shell amounted
to USD 579 mn and included customary closing
adjustments. As a result of this transaction, OMV
obtained joint control over Pohokura and Maui
fields, as unanimous consent is required for
strategic and operational decisions. The accounting
of the former stakes held in the two assets was out
of IFRS 11 scope, as the main decisions could be
taken by more than one combination of affirmative
votes of the involved parties. As OMV has now joint
control and together with the other involved parties
rights to the assets and obligations for the liabilities,
the share in Pohokura was classified as joint
operations as a result of this transaction.
Furthermore, on December 28, 2018, OMV acquired
from Todd Petroleum Mining Company Limited their
6.25% share in Maui for a consideration of 1 NZD.
As a result of the transaction, OMV obtained 100%
interest in Maui field and assumed control.
As the closing date of the transactions was at the
end of 2018, there was no contribution from the
New Zealand acquisitions to OMV Group’s consoli-
dated sales and net income.
On June 28, 2018, the sale of the Upstream compa-
nies active in Pakistan was closed. The gain on the
disposal of the subsidiaries amounted to
EUR 52 mn and was recognized in the line “Other
operating income.” The gain is mainly attributable
to the reclassification (“recycling”) of FX gains from
other comprehensive income to the income
statement.
On December 21, 2018, the sale of OMV Tunisia
Upstream GmbH was closed. The gain on the
disposal of the subsidiary amounted to EUR 39 mn
and was recognized in the line “Other operating
income.”
Changes in consolidated Group – Downstream
On October 1, 2018, OMV acquired an additional
interest of 51.72% in DUNATÀR Köolajtermék Tároló
és Kereskedelmi Kft. (DUNATÀR), which was
previously held as other not consolidated invest-
ment (previous OMV share 48.28%). The transaction
was effected through the acquisition of 100% shares
in PETRODYNE-CSEPEL Zrt., which held the
remaining shares in DUNATÀR.
Following the intensification of the strategic
partnership between OMV and the Emirate of Abu
Dhabi in the Downstream business, OMV will
exercise joint control over Abu Dhabi Petroleum
Investments LLC (ADPI, OMV’s interest 25%). ADPI
is the holding company of a 40% interest in Pak-
137
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Arab Refinery Limited (PARCO; indirect interest of
OMV amounts to 10%), located in Pakistan. There-
fore, OMV accounted both investments at-equity
starting with December 31, 2018. The 25% interest in
ADPI was previously accounted for at fair value
through OCI.
On September 6, 2018, the sale of OMV Samsun
Elektrik Üretim Sanayi ve Ticaret A.Ş. was closed.
The loss on the disposal of the subsidiary amounted
to EUR 150 mn and was recognized in the line
“Other operating expenses.” The loss is mainly
attributable to the reclassification (“recycling”) of
Fair values acquired
In EUR mn
FX losses from other comprehensive income to the
income statement.
Acquired net assets and goodwill calculation
The fair value of the net assets acquired in New
Zealand matched the purchase price paid and is
further detailed in the following table. The fair value
of the trade receivables substantially matched their
carrying amount, and all contractual cash flows less
immaterial credit loss effects are expected to be
collected.
Shell U/S New
Zealand
Other 1
Intangible assets
Property, plant and equipment
Non-current assets
Inventories
Trade receivables
Other financial and non-financial assets
Cash and cash equivalents
Current assets
Total assets
Pensions and similar obligations
Decommissioning and restoration obligations
Deferred taxes
Non-current liabilities
Trade payables
Income tax liabilities
Decommissioning and restoration obligations
Other provisions
Other liabilities
Current liabilities
Total liabilities
Net assets
Net assets acquired
357
772
1,129
4
42
9
119
174
1,303
4
642
117
764
34
17
3
17
2
72
835
468
468
29
21
50
0
0
0
3
3
52
-
46
0
45
0
-
-
-
-
0
45
7 2
4
1 Includes Todd and DUNATÀR
2 OMV Group acquired 51.72% of DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft. The previous interest held amounting to 48.28% was accounted for
as other not consolidated investment.
Measurement of goodwill
In EUR mn
Consideration given (cash)
FX hedge effect
Net assets acquired
Goodwill
1 Includes Todd and DUNATÀR
138
Shell U/S New
Zealand
500
(32)
468
—
Other 1
10
—
4
7
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Changes in ownership of subsidiaries without
gain/loss of control
On June 7, 2018, OMV increased its interest in
KOM MUNAI LLP, based in Aktau (Kazakhstan), to
100% by acquiring the remaining non-controlling
interest.
Other significant transactions
On April 29, 2018, OMV signed an agreement for the
award of a 20% stake in the offshore concession in
Abu Dhabi, SARB and Umm Lulu, as well as the
associated infrastructure. The agreed participation
fee of USD 1.5 bn was allocated to the acquired
assets and is recognized in the lines “Intangible
assets” and “Property, plant and equipment” in the
balance sheet.
On December 19, 2018 a concession agreement was
signed awarding OMV with a 5% interest in the
Ghasha concession offshore Abu Dhabi comprising
the Ghasha mega project.
Changes in consolidated Group after the
reporting period – Upstream
On January 31, 2019 OMV has bought a 50% stake
of the issued share capital in SapuraOMV Upstream
Sdn. Bhd for an amount of USD 540 mn. In addition,
the parties agreed to an additional consideration of
up to USD 85 mn based on certain conditions,
mainly linked to the resource volume in Block 30,
Mexico, at the time the final investment decision is
taken. Both parties have also agreed to refinance
the existing intercompany debt of USD 350 mn.
The initial accounting for the business combination
is not yet complete and is based on preliminary
unaudited financials of SapuraOMV Upstream Sdn.
Bhd. The estimated impact on OMV Group’s
financials is detailed in the below tables.
Fair values acquired
In EUR mn
Intangible assets
Property, plant and equipment
Deferred taxes
Non-current assets
Inventories
Trade receivables
Other financial and non-financial assets
Cash and cash equivalents
Current assets
Total assets
Other interest-bearing debts
Decommissioning and restoration obligations
Deferred taxes
Non-current liabilities
Other interest-bearing debts
Trade payables
Income tax liabilities
Other liabilities
Current liabilities
Total liabilities
Net assets
Non-controlling interests
Net assets acquired
SapuraOMV
708
669
4
1,381
17
12
59
8
96
1,476
247
69
410
726
68
43
1
35
147
872
604
(302)
302
139
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Measurement of goodwill
In EUR mn
Consideration given (cash)
FX hedge effect
Net assets acquired
Goodwill
SapuraOMV
470
2
302
170
The non-controlling interest in SapuraOMV Up-
stream Sdn. Bhd. is measured at its proportionate
share of the acquiree’s identifiable net assets. The
goodwill expected to be recorded is mostly related
to the deferred tax liability recognized for the
differences in book and tax values of the assets
acquired. The goodwill is not expected to be
deductible for income tax purposes.
Cash flow impact of acquisitions and disposals
Cash flow from investing activities included an
outflow of USD 1.5 bn attributable to the acquisition
of a 20% stake in the offshore concession in Abu
Dhabi, SARB and Umm Lulu, and the associated
infrastructure, shown in the line “Intangible assets
and property, plant and equipment” in the cash flow
statement.
The cash flow from investing activities further
contained EUR 350 mn net cash outflow related to
the acquisition of Shell’s Upstream business in New
Zealand reflected in the line “Acquisition of
subsidiaries and businesses net of cash acquired”.
Net cash outflows related to the acquisition of subsidiaries and businesses
In EUR mn
Consideration paid
less cash acquired
Net cash outflows from subsidiaries and businesses acquired
2018
478
(121)
357
The proceeds from the sale of subsidiaries and
businesses (net of cash disposed) were mainly
attributable to the divestments of OMV’s Upstream
business in Pakistan, of parts of OMV’s Upstream
Business in Tunisia, of OMV´s share in Polarled
pipeline and Nyhamna gas processing facilities in
North Sea region and of OMV Samsun Elektrik
Üretim Sanayi ve Ticaret A.Ş. as summarized in the
following table:
Net cash inflows from disposal of subsidiaries and businesses
In EUR mn
Consideration received
less cash disposed of
Net cash inflows from disposal of subsidiaries and businesses
Net assets of disposed subsidiaries and businesses
In EUR mn
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets of disposed subsidiaries and businesses
140
2018
465
(23)
442
2018
497
132
157
80
391
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Segment Reporting
4 Segment Reporting
Business operations and key markets
For business management purposes, OMV is
divided into two operating Business Segments:
Upstream and Downstream, as well as the segment
Corporate and Other (Co&O). Each segment
represents a strategic unit with different products
and markets. Each Business Segment is managed
independently. Strategic business decisions are
made by the Executive Board of OMV. With the
exception of Co&O, the reportable segments of
OMV are the same as the operating segments.
Upstream (U/S) engages in the business of oil and
gas exploration, development and production and
focuses on the regions Central and Eastern Europe,
North Sea, Russia, Middle East and Africa and Asia-
Pacific.
The Downstream Oil (D/S Oil) part of the Down-
stream (D/S) Business Segment refines and markets
fuel products and petrochemicals. It operates the
refineries Schwechat (Austria), Burghausen (Germa-
ny) and Petrobrazi (Romania) with an annual
capacity of 17.8 mn t. In these refineries, crude oil is
processed into petroleum products, which are sold
to commercial and private customers. OMV holds a
strong position in the markets located within the
areas of its supply, serving commercial customers
and operating a retail network of approximately
2,100 filling stations. Downstream Gas (D/S Gas)
operates across the gas value chain with a success-
ful gas sales and logistics business in Europa. OMV
is operating storage capacities in Austria and
Germany and holds a stake in GAS CONNECT
AUSTRIA GmbH which engages in the regulated gas
transportation business in Austria. Downstream Gas
activities also cover supply, marketing and trading
of gas in Europe and Turkey and the Group’s power
business activities, with one gas-fired power plant
in Romania.
Group management, financing and insurance
activities and certain service functions are concen-
trated in the Co&O segment.
The key measure of operating performance for the
Group is Clean CCS Operating Result. Total assets
include intangible assets as well as property, plant
and equipment. Sales to external customers are
split up by geographical areas on the basis of where
the delivery of goods or services is effective.
Accounting policies of the operating segments are
the same as those described in the summary of
significant accounting policies, with certain excep-
tions for intra-group sales and cost allocations by
the parent company, which are determined in accor-
dance with internal OMV policies. Management is of
the opinion that the transfer prices of goods and
services exchanged between segments correspond
to market prices. Business transactions not attribut-
able to operating segments are included in the
results of the Co&O segment.
The disclosure of special items is considered
appropriate in order to facilitate analysis of ordinary
business performance. To reflect comparable
figures, certain items affecting the result are added
back or deducted. These items can be divided into
four subcategories: personnel restructuring,
unscheduled depreciation and write-ups, asset
disposals and other.
Furthermore, to enable effective performance
management in an environment of volatile prices
and comparability with peers, the Current Cost of
Supply (CCS) effect is eliminated from the result.
The CCS effect, also called inventory holding gains
and losses, is the difference between the cost of
sales calculated using the current cost of supply
based on purchases from the most recent month
and the cost of sales calculated using the weighted
average method, after adjusting for any changes in
valuation allowances. In volatile energy markets,
measurement of the costs of petroleum products
sold based on historical values (e.g. weighted
average cost) can have distorting effects on
reported results. This performance measurement
indicator enhances the transparency of results and
is commonly used in the oil industry. OMV, there-
fore, publishes this measure in addition to the
Operating Result determined according to IFRS.
141
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Segment reporting
In EUR mn
U/S
D/S
thereof
D/S Oil
thereof
D/S Gas
Sales revenues 1
Intra-group sales
External sales revenues
5,556
(3,386)
2,170
20,830
(74)
20,756
14,755
(48)
14,707
6,215
(166)
6,049
Other operating income
329
127
59
69
thereof write-up of
tangible and intangible
assets
Net income from equity-
accounted investments
Depreciation and
amortization
Impairment losses (incl.
exploration & appraisal)
Operating Result
Special items for personnel
restructuring
Special items for
unscheduled depreciation
and write-ups
Special items for asset
disposal
Other special items
Special items
CCS effect
Clean CCS Operating
Result
Segment assets 2
Additions in PPE/IA 3
Equity-accounted invest-
ments
106
1
1
40
352
327
1,231
467
398
165
2,122
3
1,420
3
1,402
11
(52)
(2)
(52)
(95)
—
4
1
(3)
216
219
4
3
1
(4)
32
33
4
2,027
13,536
3,003
1,643
4,755
558
1,439
3,798
501
—
25
69
—
18
1
—
1
184
185
—
204
957
56
428
2,582
2,509
74
thereof
intraseg-
mental
elim.
D/S Co&O
Total
Consoli-
dation
Group
total
2018
(139)
139
—
—
339
(335)
4
61
26,725
(3,795)
22,930
(3,795) 22,930
—
3,795
22,930
—
517
—
517
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
106
391
—
—
106
391
20
1,718
—
1,718
0
(47)
168
3,495
24
40
—
2
—
26
—
(51)
(3)
164
149
4
—
28
—
—
—
—
—
(31)
168
3,524
40
(51)
(3)
164
149
(27)
(21)
3,649
141
25
18,432
3,585
(3)
3,646
—
—
18,432
3,585
—
3,011
—
3,011
1 Including intra-group sales
2 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale
3 Excluding additions in assets reclassified to held for sale
142
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Segment reporting
In EUR mn
U/S
D/S
thereof
D/S Oil
thereof
D/S Gas
thereof
intraseg-
mental
elim.
D/S
2017
Co&O
Total
Consoli-
dation
Group
Total
Sales revenues 1
Intra-group sales
External sales revenues
4,168
(2,839)
1,329
18,967
(79)
18,887
14,099
(34)
14,065
4,983
(161)
4,822
Other operating income
260
174
91
82
(116)
116
—
—
355
(349)
6
54
23,490
(3,267)
20,222
(3,267) 20,222
—
3,267
20,222
—
488
—
488
thereof write-up of
tangible and
intangible assets
Net income from equity-
accounted investments
Depreciation and
amortization
Impairment losses (incl.
exploration & appraisal)
Operating Result
Special items for
personnel restructuring
Special items for
unscheduled depreciation
and write-ups
Special items for asset
disposal
Other special items
Special items
CCS effect
Clean CCS Operating
Result
Segment assets 2
Additions in PPE/IA 3
Equity-accounted invest-
ments
34
14
13
107
403
395
1,264
471
396
—
8
75
209
1,218
17
584
2
412
14
171
3
—
3
2
5
1,232
1,242
2
(19)
26
(3)
7
—
(12)
2
1,204
1,197
(55)
(55)
14
3
28
45
—
1,225
11,322
1,274
1,770
4,839
474
1,554
3,704
409
217
1,135
64
430
2,482
2,411
72
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
47
510
—
—
47
510
26
1,761
—
1,761
—
(48)
226
1,753
—
(21)
226
1,732
27
31
—
31
—
—
6
32
—
(16)
31
1,235
1,281
(55)
—
—
—
—
—
(16)
31
1,235
1,281
(55)
(16)
2,979
(21)
2,958
140
15
16,301
1,762
—
—
16,301
1,762
—
2,913
—
2,913
1 Including intra-group sales
2 Property, plant and equipment (PPE), intangible assets (IA), not including assets reclassified to assets held for sale
3 Excluding additions in assets reclassified to held for sale
143
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Other special items included in 2018 in Upstream
temporary hedging effects of EUR 89 mn, gains
from divestments in Pakistan in amount of
EUR 52 mn and Tunisia in amount of EUR 39 mn,
partly compensated by special items related to
the contingent consideration from the divest-
ment of Rosebank and of OMV (U.K.) Limited
amounting to EUR (78) mn, mainly as a result of
a shift in the expected final investment decision.
In Downstream other special items were
impacted by divestment of the Samsun power
plant in Turkey in amount of EUR (150) mn and
by the impairment of the Borealis fertilizer
business in amount of EUR (33) mn.
2017 Other special items in Downstream Oil
mainly included the divestment of OMV Petrol
Ofisi.
Information on geographical areas
In EUR mn
Austria
Germany
Romania
Russia
New Zealand
United Arab Emirates
Rest of CEE
Rest of Europe
Rest of world 2
Total
Not allocated assets
Segment assets
2018
2017
External
sales
Allocated
assets 1
External
sales
Allocated
assets 1
8,264
3,717
3,973
697
256
77
3,322
1,241
1,384
22,930
3,046
962
6,165
868
1,406
1,630
487
2,070
1,450
18,084
348
18,432
6,416
3,065
3,449
137
276
18
2,765
963
3,132
20,222
3,002
985
6,159
1,093
270
—
465
2,395
1,581
15,950
351
16,301
1 Property, plant and equipment (PPE), intangible assets (IA)
2 Rest of world: Principally Australia, Kazakhstan, Libya, Pakistan, Tunisia, Yemen, Singapore, Hong Kong and Kurdistan Region of Iraq
Not allocated assets contained goodwill in
amount of EUR 29 mn (2017: EUR 40 mn) related
to the cash-generating unit ‘Refining West’ and in
amount of EUR 319 mn (2017: EUR 311 mn) to
the cash-generating unit ‘Middle East and Africa’
as these CGUs are operating in more than one
geographical area.
144
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Notes to the Income Statement
5 Sales revenues
Revenues
In EUR mn
Revenue from contracts with customers
Revenue from other sources
Sales revenue
Revenues from contracts with customers
In EUR mn
Crude Oil, NGL, condensates
Natural gas and LNG
Fuel, heating oil and other refining products
Petrochemicals
Gas storage, transmission, distribution and
transportation
Other goods and services 1
Total
Down-
stream
Oil
Down-
stream
Gas
Corporate
&Other
Upstream
1,181
744
—
—
11
39
1,975
795
4
11,130
1,981
—
843
14,754
—
5,136
—
—
207
533
5,876
—
—
—
—
—
2
2
1 Mainly non-oil business in Downstream Oil and power sales in Downstream Gas
2018
22,607
323
22,930
2018
Total
1,976
5,884
11,130
1,981
218
1,417
22,607
6 Other operating income and net income from equity-accounted investments
Other operating income and net income from equity-accounted investments
In EUR mn
Foreign exchange gains from operating activities
Gains from fair value changes of financial assets
Gains on the disposal of businesses, subsidiaries, tangible and intangible assets
Write-up of tangible and intangible assets
Residual other operating income
Other operating income
Income from equity-accounted investments
Expenses from equity-accounted investments
Net income from equity-accounted investments
2018
2017
95
23
105
106
188
517
394
2
391
88
13
152
47
188
488
512
3
510
Gains on the disposal of businesses, subsidiaries,
tangible and intangible assets contained a gain of
EUR 52 mn related to the disposal of the Upstream
companies active in Pakistan and a gain on disposal
of the subsidiary OMV Tunisia Upstream GmbH
amounting to EUR 39 mn. For further details on
changes in the group structure see Note 3.
2017 included a gain of EUR 137 mn related to the
disposal of OMV (U.K.) Limited.
Write-up of tangible and intangible assets
During the regular impairment trigger review
process, several cash generating units in Upstream
were identified that showed significantly improved
operational performance. As a result, reversals of
past impairments amounting to EUR 105 mn were
recognized for oil and gas assets in Romania (Asset
VII) and Norway (Gudrun) based on value in use
calculation.
145
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
In 2017, write-ups of tangible and intangible assets
were mainly related to the Pakistan cash generating
units with EUR 26 mn following the signing of a
sales agreement for the two Pakistani subsidiaries
and the reclassification to assets held for sale.
Residual other operating income included insurance
income related to a damage claim for the Brazi
power plant and the gas distribution station
Baumgarten in the amount of EUR 34 mn (2017:
EUR 40 mn).Net income from equity-accounted
investments decreased in 2018 compared to 2017
mainly due to a positive impact in the 2017 net
result of Pearl Petroleum Company Limited,
following the reach of a settlement over a dispute
concerning certain matters under the Heads of
Agreement at the Khor Mor and Chemchemal fields
amounting to EUR 90 mn.
7 Depreciation, amortization and impairment charges
Impairment losses are part of the income statement
line “Depreciation, amortization and impairment
charges”, except for impairment losses related to
exploration and appraisal assets which are shown in
“Exploration expenses”. The following tables
provide a reconciliation to the amounts reported in
the income statement.
Depreciation, amortization and impairment losses (excluding exploration & appraisal)
In EUR mn
Depreciation and amortization
Impairment losses (excl. exploration & appraisal)
Total
Total impairments (including exploration & appraisal)
In EUR mn
Impairment losses (excl. exploration & appraisal)
Impairment losses (exploration & appraisal)
Total
Depreciation, amortization and impairment losses – split per function
In EUR mn
Depreciation and amortization:
attributable to exploration expenses
attributable to production and operating expenses
attributable to selling, distribution and administrative expenses
Total
Impairment losses (incl. exploration & appraisal):
attributable to exploration expenses
attributable to production and operating expenses
attributable to selling, distribution and administrative expenses
Total
2018
1,718
109
1,827
2017
1,761
90
1,852
2018
2017
109
59
168
90
135
226
2018
2017
—
1,549
169
1,718
59
108
2
168
—
1,594
167
1,761
135
87
3
226
Impairments in Upstream
In 2018, a sales transaction of OMV´s share in
Polarled pipeline and Nyhamna gas processing
facilities in the North Sea region was closed and
resulted in a pre-tax impairment amounting to
EUR 36 mn. Other impairments in 2018 are mainly
related to the unsuccessful workovers and obsolete
or replaced assets in Romania (EUR 58 mn),
unsuccessful exploration wells in Romania, Norway
and Bulgaria (EUR 37 mn) as well as to an impaired
exploration license in Madagascar (EUR 14 mn)
following an exit decision.
146
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
In 2017, total impairments in the Upstream segment
were mainly related to unsuccessful exploration
wells in Romania, United Arab Emirates, Bulgaria
and Norway (EUR 116 mn) as well as to unsuccess-
ful workovers and obsolete or replaced assets in
Romania (EUR 63 mn).
Impairments in Downstream
In 2018 as well as in 2017, there were no significant
impairments in the Downstream Business Segment.
and natural gas resources. All such activities are
recorded within the Upstream segment.
8 Exploration expenses
The following financial information represents
the amounts included within the Group totals
relating to exploration for and appraisal of oil
Exploration for and appraisal of mineral resources
In EUR mn
Impairment losses (exploration & appraisal)
Other exploration costs
Exploration expenses
Total assets – exploration and appraisal expenditure incl. acquisition of unproved
reserves
Net cash used in operating activities
Net cash used in investing activities 1
1 Does not include the acquisition of Shell´s Upstream assets in New Zealand (see Note 3 for more details)
9 Other operating expenses
Other operating expenses
In EUR mn
Foreign exchange losses from operating activities
Losses on disposals of businesses, subsidiaries, tangible and intangible assets
Losses from fair value changes of financial assets
Net impairment losses on financial assets measured at amortized cost
Personnel reduction schemes
Research and development expenses
Residual other operating expenses
Other operating expenses
2018
59
115
175
1,906
133
474
2018
64
162
85
11
34
40
90
485
2017
135
86
221
1,019
99
118
2017
105
1,228
32
5
16
33
71
1,491
Losses on the disposal of businesses, subsidiaries,
tangible and intangible assets showed in 2018 a loss
on the divestment of OMV Samsun Elektrik Üretim
Sanayi ve Ticaret A.Ş. of EUR 150 mn. For further
details on changes in the group structure see
Note 3.
nized for the financial assets related to the contin-
gent considerations from the divestments of
Rosebank and of OMV (U.K.) Limited. The recent
developments in the Rosebank license led to a delay
of the estimated final investment date. For further
details see Note 18.
2017 contained a loss on the divestment of OMV
Petrol Ofisi disposal group of EUR 1,209 mn, which
was mainly related to the reclassification (“recy-
cling”) of FX losses from other comprehensive
income to the income statement.
Losses from fair value changes of financial assets
contained a negative fair value adjustment of
EUR 88 mn (2017: EUR 36 mn), which was recog-
Net impairment losses on financial assets measured
at amortized cost are mainly related to impairments
for receivables from Romanian State. For further
details see Note 18.
In 2017, Residual other operating expenses con-
tained a positive impact of OMV Petrom SA from
the partial reversal of provision related to litigations
147
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
with employees, following the outcome of court
decisions.
10 Personnel expenses
Personnel expenses
In EUR mn
Wages and salaries
Costs of defined benefit plans
Costs of defined contribution plans
Net expenses for personnel reduction schemes
Other employee benefits
Taxes and social contribution
Total
2018
788
8
25
34
134
120
1,108
2017
744
12
25
16
150
169
1,116
The total expenses for pensions included in the
costs of defined benefit plans, costs of defined
contribution plans and net expenses for person-
nel reduction schemes amounted to EUR 41 mn
(2017: EUR 37 mn).
11 Net financial result
Interest income
In EUR mn
Derivatives
Discounted receivables
Loans, receivables and cash deposits
Other
Interest income
Interest income from loans, receivables and cash
deposits included EUR 51 mn (2017: EUR 20 mn)
related to the Nord Stream 2 financing agreement.
For further details see Note 18.
Interest expenses
In EUR mn
Financial liabilities measured at amortized cost
Non-financial liabilities
Provisions for decommissioning and restoration obligations
Provisions for jubilee payments, personnel reduction plans and other employee benefits
Provisions for pensions and severance payments
Other
Interest expenses, gross
Capitalized borrowing costs
Interest expenses
2018
2017
8
9
98
2
117
—
10
51
4
64
2018
2017
151
11
84
3
15
46
311
(21)
290
150
8
73
3
15
42
291
(26)
265
The interest expenses on pension provisions were
netted against interest income on pension plan
assets amounting to EUR 7 mn (2017: EUR 7 mn).
For OMV Petrom SA the unwinding expenses for
decommissioning provision are included net of the
unwinding income for related state receivables. For
further details see Note 18.
148
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Other interest expenses included unwinding
expenses for the Gate LNG obligation and associat-
ed transportation commitments of OMV Gas
Marketing & Trading GmbH in amount of EUR 21 mn
(2017: EUR 18 mn). For further details see Note 23.
Capitalized borrowings costs applied to the carrying
value of qualifying assets and were mainly related
to oil and gas development assets in Norway. The
average interest rate used was 2.4% (2017: 2.6%).
Other financial income and expense
In EUR mn
Financing charges for factoring and securitization
Net foreign exchange gain/ (loss)
Other
Other financial income and expense
2018
2017
(31)
(11)
(30)
(72)
(27)
(26)
(8)
(60)
The position Other was mainly related to bank
charges, including breakage fees for early repay-
ment of loans, amounting to EUR 30 mn (2017:
EUR 12 mn). In 2017 the position Other was also
impacted by proceeds from the liquidation of
NABUCCO Gas Pipeline International GmbH which
amounted to EUR 4 mn.
12 Taxes on income
Taxes on income
In EUR mn
Current taxes
thereof related to previous years
Deferred taxes
Total taxes on income
Changes in deferred taxes
In EUR mn
Deferred taxes January 1
Adjustments on initial application of IFRS 9 and IFRS 15
Adjusted deferred taxes January 1
Deferred taxes December 31 1
Changes in deferred taxes
Deferred taxes accounted for in equity
Changes in consolidated Group, exchange differences and other changes 2
Deferred taxes per income statement
The deferred taxes per income statement comprise the following elements:
Change in tax rate
Release of and allocation to valuation allowance for deferred taxes
Adjustments within loss carryforwards (not recognized in prior years, expired loss
carryforwards and other adjustments)
Reversal of temporary differences, including additions to and use of loss carryforwards
2018
1,007
21
298
1,305
2018
338
1
339
28
(310)
22
(9)
(298)
8
118
(17)
(406)
2017
492
(26)
142
634
2017
837
338
(499)
(2)
359
(142)
13
122
5
(282)
1 Including deferred taxes reclassified to assets or liabilities associated with assets held for sale of EUR 0 mn (2017: EUR 31 mn)
2 2018 included the acquisition of Shell’s Upstream business in New Zealand (EUR 117 mn) as well as the disposal of OMV’s share in Polarled pipeline
and Nyhamna gas processing facilities in North Sea region (EUR (100) mn). 2017 mainly contained the acquisition of JSC Gazprom YRGM Development
(EUR 221 mn), the divestments of OMV (U.K.) Limited (EUR 177 mn) and OMV Petrol Ofisi disposal group (EUR (74) mn).
149
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Taxes on income accounted for in other comprehensive income
In EUR mn
Deferred taxes
Current taxes
Total
2018
2017
53
3
55
(2)
(6)
(7)
In 2018, deferred tax impact booked in profit or loss
related to the usage of tax loss carryforwards was
EUR 205 mn (2017: EUR 139 mn).
a 10% investment share or more for a minimum
period of one year, are also excluded from taxation
at the level of the Austrian parent company.
OMV Aktiengesellschaft forms a tax group in
accordance with section 9 of the Austrian Corporate
Income Tax Act 1988 (KStG), which aggregates the
taxable profits and losses of all the Group’s main
subsidiaries in Austria and possibly arising losses of
one foreign subsidiary (OMV AUSTRALIA PTY LTD).
Dividend income from domestic subsidiaries is in
general exempt from taxation in Austria. Dividends
from EU- and EEA-participations as well as from
subsidiaries whose residence state has a compre-
hensive mutual administrative assistance agree-
ment with Austria are exempt from taxation in
Austria if certain conditions are fulfilled. Dividends
from other foreign investments that are comparable
to Austrian corporations, for which the Group holds
In 2018 as well as in the previous year, a valua-
tion allowance for deferred tax assets for the
Austrian tax group was recognized. The valuation
allowance was reported in the income statement,
except to the extent that the deferred tax assets
arose from transactions or events which were
recognized outside profit or loss, i.e. in other
comprehensive income or directly in equity.
The effective tax rate is the ratio of income tax to
profit before tax. The tables hereafter reconcile
the effective tax rate and the standard Austrian
corporate income tax rate of 25% showing the
major influencing factors.
Tax rate reconciliation in %
Austrian corporate income tax rate
Tax effect of:
Differing foreign tax rates
Non-deductible expenses
Non-taxable income
Change in tax rate
Permanent effects within tax loss carryforwards
Tax write-downs and write-ups on investments at parent company level
Change in valuation allowance for deferred taxes
Taxes related to previous years
Other
Effective Group income tax rate
2018
25
2017
25
16
5
(5)
(0)
0
(0)
(4)
1
2
40
15
31
(20)
(1)
0
3
(8)
(2)
(0)
43
150
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Tax rate reconciliation in EUR mn
Theoretical taxes on income based on Austrian income tax rate
Tax effect of:
Differing foreign tax rates
Non-deductible expenses
Non-taxable income
Change in tax rate
Permanent effects within tax loss carryforwards
Tax write-downs and write-ups on investments at parent company level
Change in valuation allowance for deferred taxes
Taxes related to previous years
Other
Total taxes on income
2018
824
2017
372
528
166
(178)
(8)
2
(6)
(118)
35
59
1,305
225
457
(295)
(13)
0
38
(122)
(25)
(2)
634
The Group’s effective tax rates in 2018 and 2017
were significantly impacted by high result contribu-
tions in Upstream from high tax rates fiscal regimes
such as Norway and Libya. In 2017, the effective tax
rate was additionally affected by the divestment of
OMV Petrol Ofisi.
Non-deductible expenses in 2018 mainly contained
FX losses reclassified from other comprehensive
income to the income statement resulting from the
divestment of the Samsun power plant in Turkey as
well as permanent effects in depreciation, depletion
and amortization. In 2017 non-deductible expenses
were mainly impacted by permanent effects related
to FX losses reclassified from other comprehensive
income to the income statement resulting from the
divestment of OMV Petrol Ofisi disposal group as
well as permanent effects in depreciation, depletion
and amortization from acquisitions.
Non-taxable income in 2018 and 2017 was predomi-
nantly attributable to the result contribution from
equity-accounted investments as well as to tax
incentives in Norway.
In 2017, the position tax write-downs and write-ups
on investments at parent company level was
predominantly impacted by taxable write-ups of
participations mainly in Downstream companies.
According to Austrian Corporate Tax Law the tax
relief of such impairments may only be claimed in
installments over seven years.
13 Earnings Per Share
Earnings Per Share (EPS)
Earnings
attributable
to stock-
holders of the
parent
in EUR mn
2018
Weighted
average
number of
shares out-
standing
Earnings
attributable
to stock-
holders of the
parent
in EUR mn
2017
Weighted
average
number of
shares out-
standing
EPS in EUR
EPS in EUR
Basic
Diluted
1,438
1,438
326,651,395
327,145,348
4.40
4.40
435
435
326,486,772
327,272,727
1.33
1.33
The calculation of diluted Earnings Per Share takes
into account the weighted average number of
ordinary shares in issue following the conversion of
all potentially diluting ordinary shares. This includes
493,953 (2017: 930,424) contingently issuable bonus
shares related to the Long Term Incentive Plans and
the Equity Deferral.
151
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Notes to the Statement of Financial Position
14 Intangible assets
Intangible assets
In EUR mn
Costs of acquisition and production
January 1, 2018
Foreign exchange differences
Changes in consolidated Group
Additions
Internally generated additions
Transfers
Assets held for sale
Disposals
December 31, 2018
Development of amortization
January 1, 2018
Foreign exchange differences
Amortization
Impairments
Transfers
Assets held for sale
Disposals
December 31, 2018
Concessions,
software,
licenses,
rights
Oil and gas
assets with
unproved
reserves
Goodwill
Total
2018
1,423
8
386
553
2
(15)
(2)
(103)
2,252
404
1
—
51
(6)
(2)
(103)
346
1,932
(153)
0
23
—
4
(34)
(3)
1,769
719
(17)
109
0
0
(30)
(2)
779
416
4
7
—
—
—
(7)
—
420
—
—
—
—
—
—
—
—
416
420
492
(56)
—
—
—
—
(20)
—
416
—
—
—
—
—
—
—
—
—
492
416
3,771
(141)
393
576
2
(11)
(43)
(107)
4,441
1,123
(15)
109
51
(6)
(32)
(105)
1,125
2,648
3,317
3,059
(168)
1,106
171
2
(178)
(134)
(86)
3,771
1,346
(62)
31
119
(121)
(114)
(76)
(1)
1,123
1,713
2,648
Carrying amount January 1, 2018
Carrying amount December 31, 2018
1,213
991
1,019
1,906
Costs of acquisition and production
January 1, 2017
Foreign exchange differences
Changes in consolidated Group
Additions
Internally generated additions
Transfers
Assets held for sale
Disposals
December 31, 2017
Development of amortization
January 1, 2017
Foreign exchange differences
Amortization
Impairments
Transfers
Assets held for sale
Disposals
Write-ups
December 31, 2017
2017
1,707
(89)
—
162
1
(198)
(111)
(50)
1,423
612
(42)
—
119
(133)
(111)
(40)
(1)
404
859
(24)
1,106
9
1
20
(3)
(36)
1,932
733
(19)
31
0
13
(3)
(36)
0
719
Carrying amount January 1, 2017
Carrying amount December 31, 2017
126
1,213
1,095
1,019
152
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
In 2018 there were changes in consolidated group of
EUR 386 mn related to the Upstream acquisitions in
New Zealand. Additions to the oil and gas assets
included EUR 261 mn related to the offshore fields
Umm Lulu and SARB in Abu Dhabi (including
decommissioning, restoration and other obliga-
tions). See Note 3 for additional details.
Intangible assets with a total carrying amount of
EUR 11 mn (2017: EUR 20 mn) were transferred to
assets held for sale and were related to OMV
Samsun Elektrik Üretim Sanayi ve Ticaret A.Ş.as well
as to goodwill allocated to OMV Tunisia Upstream
GmbH. Both companies were disposed within the
same year. For details see Note 3 and Note 20.
Goodwill arising from business combinations has
been allocated to the following CGUs and groups of
CGUs, for impairment testing:
Goodwill allocation
In EUR mn
Middle East and Africa
Goodwill allocated to Upstream
Downstream Gas Austria
Refining West
Retail Slovakia
Refining Austria
Goodwill allocated to Downstream
Total
2018
2017
319
319
38
29
7
27
101
420
311
311
38
40
7
20
105
416
In 2018, the goodwill allocated to Middle East and
Africa region increased due to positive foreign
currency differences, which were partially compen-
sated by the reclassification of goodwill allocated to
OMV Tunisia Upstream GmbH to assets held for
sale.
In Downstream segment, the goodwill allocated to
Refining Austria increased by EUR 7 mn following
the acquisition of additional shares in DUNATÀR
Köolajtermék Tároló és Kereskedelmi Kft. (see Note 3
for further details). Goodwill allocated to Refining
West decreased due to unfavorable foreign ex-
change differences.
Goodwill impairment tests based on a value in use
calculation have been performed and showed a
headroom in all cases. For the impairment test of
the goodwill allocated to Middle East and Africa, an
after-tax discount rate of 11.19% (2017: 8.72%) was
used. There is no reasonable change in the discount
rate that would lead to an impairment. Furthermore,
assuming a long term oil price of USD 60 per barrel
would also not lead to an impairment.
For details on contractual obligations for the
acquisition of intangible assets refer to Note 15
Property, plant and equipment.
153
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
15 Property, plant and equipment
Property, plant and equipment
In EUR mn
Costs of acquisition and construction
January 1, 2018
Foreign exchange differences
Changes in consolidated Group
Additions
Transfers
Assets held for sale
Disposals
December 31, 2018
Development of depreciation
January 1, 2018
Foreign exchange differences
Depreciation
Impairments
Transfers
Assets held for sale
Disposals
Write-ups
December 31, 2018
Carrying amount January 1, 2018
Carrying amount December 31, 2018
Land and
buildings
Oil and
gas assets
Plant and
machinery
Other
fixtures,
fittings
and
equipment
Assets
under con-
struction
2,760
(14)
3
62
17
(31)
(22)
2,774
1,556
(8)
84
1
3
(13)
(15)
(1)
1,607
1,203
1,167
20,603
192
778
2,401
(25)
(446)
(470)
23,033
12,144
109
1,091
109
(9)
(174)
(107)
(103)
13,060
8,459
9,972
8,734
(62)
5
235
119
(244)
(96)
8,691
5,559
(38)
349
1
(19)
(148)
(93)
(2)
5,608
3,175
3,083
1,836
(3)
7
76
73
(4)
(30)
1,953
1,375
(3)
84
0
33
(2)
(28)
(0)
1,459
461
494
385
(2)
0
235
(173)
(11)
(24)
411
30
0
—
5
(0)
—
(23)
(0)
12
355
399
Total
34,317
111
793
3,008
11
(735)
(642)
36,862
20,663
61
1,609
117
7
(338)
(266)
(106)
21,747
13,654
15,115
154
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Property, plant and equipment
In EUR mn
Costs of acquisition and construction
January 1, 2017
Foreign exchange differences
Additions
Transfers
Assets held for sale
Disposals
December 31, 2017
Development of depreciation
January 1, 2017
Foreign exchange differences
Depreciation
Impairments
Transfers
Assets held for sale
Disposals
Write-ups
December 31, 2017
Carrying amount January 1, 2017
Carrying amount December 31, 2017
Land and
buildings
Oil and
gas assets
Plant and
machinery
Other
fixtures,
fittings
and
equipment
Assets
under con-
struction
2,717
(15)
55
22
0
(19)
2,760
1,499
(4)
85
1
0
0
(14)
(10)
1,556
1,219
1,203
21,480
(1,372)
1,071
186
(482)
(281)
20,603
12,144
(879)
1,205
83
149
(408)
(116)
(33)
12,144
9,336
8,459
8,578
(124)
214
138
(1)
(71)
8,734
5,322
(76)
355
12
17
(1)
(68)
(2)
5,559
3,257
3,175
1,871
(12)
50
(28)
(5)
(41)
1,836
1,380
(8)
85
1
(41)
(3)
(38)
(1)
1,375
491
461
339
(13)
199
(135)
(3)
(2)
385
29
(1)
—
3
0
—
(2)
—
30
310
355
Total
34,987
(1,536)
1,589
182
(491)
(414)
34,317
20,374
(968)
1,730
100
125
(413)
(238)
(46)
20,663
14,613
13,654
The changes in the consolidated group in 2018 of
EUR 793 mn were mainly related to the acquisitions
of Upstream assets in New Zealand. Additions to oil
and gas assets included EUR 1,263 mn related to
the offshore fields Umm Lulu and SARB in Abu
Dhabi (including decommissioning, restoration and
other obligations). See Note 3 for more details.
Property, plant and equipment with a total carrying
amount of EUR 397 mn (2017: EUR 78 mn) were
transferred to assets held for sale, mainly related to
OMV´s share in Polarled pipeline and Nyhamna gas
processing facilities in North Sea region and OMV
Samsun Elektrik Üretim Sanayi ve Ticaret A.Ş. For
more details please see Note 7 and Note 20.
Disposals of oil and gas assets were mainly related
to downward revisions of estimates for decommis-
sioning obligations (EUR 349 mn).
Contractual obligations
In EUR mn
Intangible assets
Property, plant and equipment
Total contractual obligations
In 2018 the contractual commitments were mainly
related to exploration and production activities in
Upstream.
2018
329
674
1,003
2017
303
672
974
155
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Finance leases
Finance lease assets were mainly related to gas
storage caverns in Germany, land and filling
stations in Austria, Germany, Slovakia and the Czech
Republic, gas equipment at filling stations, a
hydrogen plant at Petrobrazi refinery in Romania,
Lease and rental agreements
In EUR mn
power generators in Upstream Romania as well as
an office building in Austria. OMV has an option to
prolong the finance lease contract for the gas
storage caverns in Germany for additional 10 years.
Land and buildings
Oil and gas assets
Plant and machinery
Other fixtures, fittings and
equipment
Total
Acquisit-
ion cost
71
15
267
2018
Accumulated
depreciation
23
7
236
Carrying
amount
49
7
31
Acquisit-
ion cost
66
16
267
2017
Accumulated
depreciation
21
6
230
Carrying
amount
45
10
37
3
355
1
266
2
89
3
351
1
257
2
94
In 2018, contingent lease payments under finance
lease agreements amounted to EUR 8 mn
(2017: EUR 9 mn).
Commitments under existing finance leases as of December 31
In EUR mn
Total future minimum lease
commitments
less interest component
Present value of minimum
lease payments
2018
2017
≤1 year
1 – 5 years
>5 years
≤1 year
1 – 5 years
>5 years
30
(17)
14
99
(60)
38
412
(176)
236
31
(17)
14
100
(62)
431
(191)
38
240
Operating leases
OMV also makes use of operating leases, mainly for
filling station sites, office buildings and vehicle
fleets. In 2018, these expenses amounted to
EUR 129 mn (2017: EUR 128 mn). There are options
to renew the leases, among others for many of the
leased filling station sites.
Future minimum lease payments under non-cancellable operating leases
In EUR mn
Payable within 1 year
Payable between 1 and 5 years
Payable after more than 5 years
Total future minimum lease commitments
2018
100
205
175
480
2017
103
214
185
501
156
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
16 Equity-accounted investments
Material associates
OMV has a 36% (2017: 36%) interest in Borealis AG,
a provider of innovative solutions in the fields of
polyolefins, base chemicals and fertilizers. The
company is incorporated in Vienna, Austria and
operates on a global level.
Furthermore, OMV has 10% (2017: 10%) of Pearl
Petroleum Company Limited, registered in Road
Town, British Virgin Islands, which is involved in
exploration and production of hydrocarbons in the
Kurdistan Region of Iraq.
According to the contractual agreement between
OMV and Pearl Petroleum Company Limited (Pearl),
OMV has significant influence within the meaning of
IAS 28, as unanimous consent is required for some
strategic decisions. Therefore Pearl is accounted for
using the equity method although OMV‘s share is
just 10%.
Both companies are not listed on public exchanges
thus quoted market prices do not exist.
The tables below contain summarized financial
information for the material associates:
Statement of comprehensive income
In EUR mn
Sales revenue
Net income for the year
Other comprehensive income
Total comprehensive income
Group’s share of comprehensive income
Dividends received
Statement of financial position
In EUR mn
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Group’s share
Goodwill
OMV Group adjustments
Group’s carrying amount of investment
Carrying amount reconciliation
In EUR mn
2018
2017
Borealis
Pearl
Borealis
8,334
907
154
1,061
382
360
2018
Borealis
2,658
7,290
2,023
1,504
6,421
2,312
30
(22)
2,319
309
256
—
256
26
34
Pearl
327
1,733
108
38
1,914
191
—
144
336
7,564
1,095
(475)
619
223
270
2017
Borealis
2,554
6,840
1,431
1,599
6,365
2,291
30
(15)
2,307
Pearl
247
1,075
—
1,075
108
67
Pearl
422
1,600
86
1
1,935
194
—
135
329
2018
2017
Borealis
Pearl
Borealis
Pearl
January 1
2,307
329
2,360
Adjustments on initial application of IFRS 9
Exchange differences
Net income
Other comprehensive income
Reclassification of cash flow hedges to balance sheet
Dividends and elimination of intercompany profits
3
—
327
55
(5)
(367)
—
16
26
—
—
(34)
n.a.
—
394
(171)
—
(276)
December 31
2,319
336
2,307
334
n.a.
(46)
108
—
—
(67)
329
157
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Contingent liabilities
On January 5, 2017, Borealis received two decisions
of the Finnish Board of Adjustment with regard to
Borealis Technology Oy. The Board of Adjustment
has confirmed the Finnish tax authority's view that
the license arrangements, entered into between
Borealis Technology Oy and Borealis AG in 2008 and
2010, should be re-characterized into transfers of
businesses. Based on this the Board of Adjustment
requests Borealis to pay EUR 297 mn, comprising of
taxes, late payment interest and penalties.
Borealis believes that this decision fails to properly
apply Finnish and international tax law and does not
adequately consider the relevant facts of the case.
Therefore, Borealis has appealed this decision to
the Helsinki Administrative Court on March 6, 2017,
and has obtained a suspension of payment.
On October 11, 2017, Borealis received a decision of
the Board of Adjustment with regard to Borealis
Polymers Oy. Unlike the Finnish tax authority, the
Board of Adjustment has recognized the license
agreement which Borealis Polymers Oy and Borealis
AG had concluded in the course of the introduction
of the toll manufacturing set up in 2009. The Board
of Adjustment has however decided that the license
percentage should be increased from 1% to 2.6%
and that in the course of the introduction of the toll
manufacturing set up “something else of value”
amounting to EUR 142 mn has been transferred. The
resulting payment request for the year 2009
amounts to EUR 62 mn comprising taxes, late
payment interest and penalties. The decision of the
Board of Adjustment did not comprise other years
than 2009 and no reassessment claims for other
years have been received yet.
Borealis believes that this decision fails to properly
apply Finnish and international tax law and does not
adequately consider the relevant facts of the case.
Therefore, Borealis has appealed this decision to
the Helsinki Administrative Court on December 15,
2017, and has obtained a suspension of payment.
Individually immaterial associates and joint
ventures
OMV holds 55.6% (2017: 55.6%) of Erdöl-
Lagergesellschaft m.b.H (ELG), which is holding the
major part of the emergency stock of crude and
petroleum products in Austria. In spite of holding
the majority of voting rights in the general assem-
bly, OMV does not have control over ELG. The
significant decisions on the financial and operating
policies are delegated to the standing shareholder’s
committee in which a quorum of two thirds of the
share capital is required for decisions.
OMV holds 15.53% (2017:15.53%) in Trans Austria
Gasleitung GmbH. As unanimous consent of the
parties is required for decisions about relevant
activities and OMV has rights to the net assets of
Trans Austria Gasleitung GmbH based on the legal
structure, OMV classified it as a joint venture
according to IFRS 11.
OMV exercises joint control over Abu Dhabi
Petroleum Investments LLC (ADPI, OMV’s interest
25%) and Pak-Arab Refinery Limited (PARCO;
indirect interest of OMV amounts to 10%) and
accounted both investments at-equity starting with
December 31, 2018. ADPI is a holding company for
its 40% interest in PARCO. As unanimous consent of
the parties is required for decisions about relevant
activities and OMV has rights to the net assets
based on the legal structure, OMV classified the
companies as joint ventures according to IFRS 11
(see Note 3 for further details).
Statement of comprehensive income for individually immaterial associates and joint ventures – Group’s share
In EUR mn
Sales revenue
Net income for the year
Total comprehensive income
2018
2017
Associates
Joint ventures
Associates
Joint ventures
555
19
19
35
20
20
396
3
3
34
5
5
158
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Carrying amount reconciliation for individually immaterial associates and joint ventures
In EUR mn
January 1
Exchange differences
Changes in consolidated Group
Net income
Disposals and other changes
Dividends
December 31
17 Inventories
Inventories
In EUR mn
Crude oil
Natural gas
Other raw materials
Work in progress: Petroleum products
Other work in progress
Finished petroleum products
Other finished products
Total
Expenses with inventories
In EUR mn
2018
2017
Associates
Joint ventures
Associates
Joint ventures
214
(18)
—
19
(1)
(13)
202
63
—
85
20
—
(15)
154
116
(4)
117
3
3
(21)
214
2018
401
233
206
115
3
571
43
1,571
49
—
19
5
—
(11)
63
2017
440
169
199
101
2
553
40
1,503
Costs of goods and materials
Inventory changes
Write-downs to net realizable value and write-offs of inventories
Reversal of inventories write-down
Purchases (net of inventory variation)
2018
14,100
(21)
16
(2)
14,094
2017
12,356
(37)
13
(2)
12,331
159
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
18 Financial assets
Financial assets 1
In EUR mn
Trade receivables from
contracts with customers
Other trade receivables
Total trade receivables
Investments in other
companies
Investment funds
Bonds
Derivatives designated and
effective as hedging
instruments
Other derivatives
Loans
Other sundry financial assets
Total other financial assets
Total
Trade receivables
Investments in other
companies
Investment funds
Bonds
Derivatives designated and
effective as hedging
instruments
Other derivatives
Loans
Other sundry financial assets
Total other financial assets
Total
Valued at
fair value
through
other
compre-
hensive
income
Valued at
fair value
through
profit or
loss
Valued at
amortized
cost
Total
carrying
amount
thereof
short-term
thereof
long-term
2018
1,460
1,878
3,338
—
—
78
—
—
671
1,108
1,857
5,195
1,541
1,878
3,420
21
6
78
392
2,384
671
1,833
5,386
8,806
1,541
1,878
3,420
—
—
32
258
1,983
2
452
2,727
6,147
2017
2,503
2,503
2,503
39
—
—
—
—
348
1,019
1,406
3,909
39
6
78
97
732
348
1,799
3,099
5,602
—
—
17
97
668
2
355
1,140
3,643
—
—
—
21
6
46
134
401
669
1,381
2,659
2,659
—
39
6
61
—
64
346
1,444
1,959
1,959
—
—
—
21
—
—
392
—
—
—
414
414
—
—
6
78
97
—
—
139
320
320
82
—
82
—
6
—
—
2,384
—
725
3,115
3,197
—
—
—
—
—
732
—
641
1,373
1,373
1 2018 financial assets were presented based on measurement categories under IFRS 9 and in 2017 based on measurement categories under IAS 39.
The carrying amount of other financial assets at fair
value through profit or loss as at Decem-
ber 31, 2018, was EUR 3,197 mn (2017:
EUR 1,373 mn). These consist of financial assets
held for trading as well as an acquired contractual
position towards Gazprom with regard to the
reserves redetermination in amount of EUR 664 mn
(2017: EUR 641 mn) in connection with the acquisi-
tion of interests in the Yuzhno Russkoye field.
OMV recognized receivables related to the contin-
gent considerations from the divestment of the 30%
stake in Rosebank and from the divestment of OMV
(U.K.) Limited, which are dependent on the date
when the Rosebank project coventurers will
160
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
approve the final investment decision. The receiva-
bles are included within other sundry financial
assets valued at fair value through profit or loss and
amounted to EUR 61 mn (2017: valued at fair value
through other comprehensive income;
EUR 139 mn). For further details see Note 9.
In 2018, the position Loans included drawdowns
and the related accrued interests under the financ-
ing agreements for the Nord Stream 2 pipeline
project in amount of EUR 669 mn (2017:
EUR 344 mn). The drawdowns made during 2018
amounted to EUR 275 mn (2017: EUR 324 mn). For
further details see Note 11.
Other sundry financial assets included expenditure
recoverable from Romanian State amounting to
EUR 378 mn (2017: EUR 434 mn) related to obliga-
tions for decommissioning, restoration and
environmental costs in OMV Petrom SA. The
receivables consist of EUR 341 mn (2017:
EUR 390 mn) for costs relating to decommissioning
and EUR 37 mn (2017: EUR 44 mn) for costs relating
to environmental cleanup.
Equity investments measured at FVOCI
In EUR mn
On March 7, 2017, OMV AG, as party in the privatiza-
tion agreement, initiated arbitration proceedings
against the Romanian State, in accordance with the
International Chamber of Commerce Rules, in Paris,
France regarding certain notices of claims unpaid by
the Romanian State in relation to well decommis-
sioning and environmental restoration obligations
amounting to EUR 33 mn. On October 6, 2017, a
request to supplement the current arbitration with
additional notices of claims in relation to well
decommissioning and environmental restoration
obligations amounting to EUR 29 mn was submitted
to International Chamber of Commerce, in Paris,
France. At the beginning of July 2018, the Arbitral
Tribunal decided that the supplementary claims
submitted are admissible.
Additionally, other sundry financial assets contain
receivables towards partners in the Upstream
business as well as seller participation and com-
plementary notes in Carnuntum DAC (see Note 36
for further details).
Investment
Abu Dhabi Petroleum Investments LLC 1
APK-Pensionskasse Aktiengesellschaft
BSP Bratislava-Schwechat Pipeline GmbH
CEESEG Aktiengesellschaft
CISMO Clearing Integrated Services and Market Operations GmbH
FSH Flughafen-Schwechat-Hydranten-Gesellschaft GmbH & Co OG
H2 Mobility Deutschland GmbH & Co KG
Other
Total
Fair value
—
2
3
6
3
2
3
3
21
2018
Fair value
adjustment
through OCI
21
(0)
—
3
1
0
—
(0)
26
Dividend
recognized
as income
8
0
—
0
0
0
—
6
15
1 Abu Dhabi Petroleum Investments LLC was reclassified to equity-accounted investments as of December 31, 2018. See Note 3 for further details.
Impairment of trade receivables
In EUR mn
January 1
Adjustment on initial application of IFRS 9
January 1, adjusted
Amounts written off
Additions/(releases)
Net remeasurement of expected credit losses
Foreign exchange rate differences and changes in consolidated group 1
December 31
1 Changes in consolidated group in 2017 included OMV Petrol Ofisi disposal group.
2018
2017
76
2
78
(3)
—
5
(0)
79
98
—
98
(2)
(4)
—
(17)
76
161
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Net remeasurement of expected credit losses is
mainly related to the trade receivables from
contracts with customers.
Credit Quality of trade receivables
In EUR mn
Equivalent to
external credit
rating
AAA, AA+, AA, AA-,
A+, A, A-
BBB+, BBB, BBB-
BB+, BB, BB-
B+, B, B-, CCC/CC
SD/D
2018
Probability of
default
Gross carrying
amount
Expected credit
loss
0.08%
0.25%
1.25%
10.33%
100.00%
1,935
725
638
41
78
3,417
1
1
4
1
71
79
Risk Class 1
Risk Class 2
Risk Class 3
Risk Class 4
Risk Class 5
Total
Impairment of other financial assets at amortized cost
In EUR mn
January 1
Adjustment on initial application of
IFRS 9
January 1, adjusted
Amounts written off
Additions/(releases)
Net remeasurement of expected
credit losses
Foreign exchange rate differences
and changes in consolidated group 1
December 31 2
2018
2017
12-month
ECL
Lifetime ECL
not credit
impaired
Lifetime ECL
credit impair-
ed
—
3
3
(0)
—
0
0
4
54
3
57
—
—
1
3
59
170
—
170
(3)
—
(9)
(0)
158
Total
224
6
230
(3)
—
(8)
3
221
242
—
242
—
(3)
—
(15)
224
1 Changes in consolidated group in 2017 included OMV Petrol Ofisi disposal group.
2 “12-month ECL” included an amount of EUR 1 mn and “Lifetime ECL credit impaired” an amount of EUR 15 mn related to expenditure recoverable
from Romanian State, which are outside the scope of IFRS 9.
162
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Credit Quality other financial assets at amortized cost – Gross carrying amount
In EUR mn
Equivalent
to external
credit
rating
AAA, AA+,
AA, AA-,
A+, A, A-
BBB+,
BBB, BBB-
BB+, BB,
BB-
B+, B, B-,
CCC/CC
SD/D
2018
Prob-
ability of
default
12-month
ECL
Lifetime
ECL not
credit
impaired
Lifetime
ECL
credit im-
paired
0.08%
410
0.25%
1,258
1.25%
85
10.33%
100.00%
0
0
1,753
—
—
165
—
—
165
4
15
2
22
117
159
Total
414
1,273
252
22
117
2,078
Risk Class 1
Risk Class 2 1
Risk Class 3
Risk Class 4
Risk Class 5
Total
1 “12-month ECL” included an amount of EUR 378 mn and “Lifetime ECL credit impaired” an amount of EUR 15 mn related to expenditure recoverable
from Romanian State, which are outside the scope of IFRS 9.
Credit Quality other financial assets at amortized cost – Expected credit loss
In EUR mn
Equivalent
to external
credit rating
AAA, AA+,
AA, AA-,
A+, A, A-
BBB+, BBB,
BBB-
BB+, BB,
BB-
B+, B, B-,
CCC/CC
SD/D
2018
Probability
of default
12-month
ECL
Lifetime
ECL not
credit
impaired
Lifetime
ECL credit
impaired
0.08%
0.25%
1.25%
10.33%
100.00%
1
2
1
0
0
4
—
—
59
—
—
59
3
15
1
22
117
158
Total
4
17
61
22
117
221
Risk Class 1
Risk Class 2 1
Risk Class 3
Risk Class 4
Risk Class 5
Total
1 “12-month ECL” included an amount of EUR 1 mn and “Lifetime ECL credit impaired” an amount of EUR 15 mn related to expenditure recoverable
from Romanian State, which are outside the scope of IFRS 9.
163
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
19 Other assets
Other assets
In EUR mn
Prepaid expenses
Advance payments on fixed assets
Other payments on account
Receivables from other taxes and social security
Contract assets
Emission rights
Other non-financial assets
Other assets
2018
2017
Short-term
Long-term
Short-term
Long-term
44
16
103
77
1
7
16
264
14
—
—
15
1
—
7
36
38
31
69
55
—
23
49
265
8
—
—
40
—
—
6
55
Out of EUR 4 mn contract assets balance recognized
due to initial application of IFRS 15 at January 1,
2018, revenue in amount of EUR 1 mn was recog-
nized in 2018. The contract asset results from a long-
term supply contract with different prices in
different periods where the rates do not reflect the
value of the goods at the time of delivery and
amounted to EUR 3 mn at December 31, 2018.
20 Assets and liabilities held for sale
Assets and liabilities held for sale
In EUR mn
Non-current assets
Deferred taxes
Other current assets
Cash and cash equivalents
Assets held for sale
Provisions
Deferred taxes
Liabilities
Liabilities associated with assets held for sale
Assets and liabilities held for sales – segment split
In EUR mn
Assets held for sale
Upstream
Downstream
Total
Liabilities associated with assets held for sale
Upstream
Downstream
Total
2018
2017
47
0
0
—
47
22
0
0
22
121
31
45
9
206
29
—
34
63
2018
2017
27
20
47
22
0
22
181
24
206
62
2
63
As of December 31, 2018, assets held for sale and
liabilities associated with assets held for sale
consisted of marginal fields in Romania as well as
various non-core assets within Downstream Oil.
In 2018 OMV finalized the divestment of the
Upstream business in Pakistan, which was classified
as held for sale as of December 31, 2017 (see
Note 3). Furthermore, OMV Samsun Elektrik Üretim
Sanayi ve Ticaret A.Ş. and OMV Tunisia Upstream
GmbH (see Note 3) as well as OMV´s share in
Polarled pipeline and Nyhamna gas processing
facilities in North Sea region (see Note 7) were
164
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
reclassified to held for sale in 2018 and disposed
within the same year.
As of December 31, 2017, the assets held for sale
and liabilities associated with assets held for sale
consisted mainly of Pakistan disposal group, filling
stations in Czech Republic and other non-core
assets within Downstream Oil. As of December 31,
2017 OMV equity of the parent included EUR 42 mn
related to Pakistan disposal group which was
recognized in other comprehensive income and
accumulated in equity.
21 OMV equity of the parent
Capital stock
The capital stock of OMV Aktiengesellschaft consists
of 327,272,727 (2017: 327,272,727) fully paid no par
value shares with a total nominal value of
EUR 327,272,727 (2017: EUR 327,272,727). There are
no different classes of shares and no shares with
special rights of control. All shares are entitled to
dividends for the financial year 2018, with the
exception of treasury shares held by OMV Aktien-
gesellschaft.
As the authorized capital granted by the Annual
General Meeting on May 13, 2009 expired on May
13, 2014, the Annual General Meeting decided upon
a new authorized capital on May 14, 2014. Specifi-
cally, it authorized the Executive Board until May 14,
2019 to increase the share capital of OMV with the
consent of the Supervisory Board – at once or in
several tranches – by an amount of up to
EUR 32,727,272 by issuing up to 32,727,272 new no-
par value common voting shares in bearer form in
return for contributions in cash. The capital increase
can also be implemented by way of indirect offer for
subscription after taking over by one or several
credit institutions according to Section 153 Para-
graph 6 Stock Corporation Act. The issue price and
the conditions of issuance can be determined by the
Executive Board with the consent of the Supervi-
sory Board.
Further, the Annual General Meeting authorized the
Executive Board, subject to the approval of the
Supervisory Board, to exclude the subscription right
of the shareholders if the capital increase serves to
(i) adjust fractional amounts or (ii) satisfy stock
options or long term incentive plans (including
matching share plans for employees, senior emplo-
yees and members of the Executive Board/ man-
agement boards of the Company or one of its
affiliates), or other employees’ stock ownership
plans.
In addition, the Supervisory Board was authorized
to adopt amendments to the Articles of Association
resulting from the issuance of shares according to
the authorized capital.
Capital reserves
Capital reserves have been formed by the contribu-
tion of funds into OMV Aktiengesellschaft by its
shareholders over and above the capital stock, on
the basis of their ownership relationship.
Hybrid capital
The hybrid capital recognized in equity in the
amount of EUR 1,987 mn consists of perpetual
hybrid notes which are subordinated to all other
creditors. According to IFRS, the proceeds of the
hybrid notes are fully treated as equity because the
repayment of the principal and the payments of
interest are solely at the discretion of OMV.
On December 7, 2015, OMV issued hybrid notes with
an aggregate size of EUR 1,500 mn, in two tranches
of EUR 750 mn each with the following interest
payable:
► The hybrid notes of tranche 1 bear a fixed
interest rate of 5.250% until, but excluding,
December 9, 2021, which is the first call date of
tranche 1. From December 9, 2021, until, but
excluding, December 9, 2025, hybrid notes of
tranche 1 will bear interest according to a reset
interest rate to be determined according to the
relevant five-year swap rate and an additional
margin of 4.942% and, from December 9, 2025,
with an additional step-up of 1% per annum.
► The hybrid notes of tranche 2 bear a fixed
interest rate of 6.250% until, but excluding,
December 9, 2025, which is the first call date of
tranche 2. From December 9, 2025, tranche 2
will bear interest according to a reset interest
rate to be determined according to the relevant
five-year swap rate and an additional margin of
5.409%, with an additional step-up of 1% per
annum
Interest is due and payable annually in arrears on
December 9 of each year, unless OMV elects to
defer the relevant interest payments. The outstand-
ing deferred interest must be paid under certain
circumstances, in particular, if the General Meeting
165
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
of OMV resolves upon a dividend payment on OMV
shares.
On June 19, 2018 OMV issued a hybrid bond with a
size of EUR 500 mn. The hybrid bears a fixed interest
rate of 2.875% until, but excluding, June 19, 2024.
From June 19, 2024 until, but excluding, June 19,
2028 the hybrid notes will bear interest at a rate
according to the relevant five-year swap rate and an
additional margin of 2.335% per annum and, from
June 19, 2028, with an additional step-up of 1% per
annum. Interest is due and payable annually in
arrears on June 19 of each year, unless OMV elects
to defer the relevant interest payments. The
outstanding deferred interest must be paid under
certain circumstances, in particular, if the General
Meeting of OMV resolves upon a dividend payment
on OMV shares.
The hybrid notes outstanding as of December 31,
2018 do not have a scheduled maturity date and
they may be redeemed at the option of OMV under
certain circumstances. OMV has, in particular, the
right to repay the hybrid notes at certain call dates.
Any accrued unpaid interest becomes payable when
the bond is redeemed. In the case of a change of
control, OMV may call the hybrid notes for redemp-
tion or else the applicable interest rate will be
subject to an increase according to the terms and
conditions of the hybrid notes.
The EUR 750 mn hybrid bond, which was issued in
2011, was called and redeemed at its nominal value
plus interest on April 26, 2018, the first possible call
date.
Revenue reserves
The Group’s revenue reserves included the net
income and losses of consolidated subsidiaries and
investments included at equity, as adjusted for the
purposes of consolidation.
Treasury shares
The Annual General Meetings for the years 2000 to
2011 (with the exception of 2010) approved the
repurchase of treasury shares. The costs of repur-
chased shares have been reflected as a reduction in
equity. Gains or losses on the re-issue of treasury
shares (issue proceeds less acquisition cost) result
in an increase or a reduction in capital reserves.
On May 18, 2016, the Annual General Meeting
authorized the Executive Board for a period of five
years from the adoption of the resolution, therefore,
until (including) May 17, 2021, upon approval of the
Supervisory Board, to dispose of or utilize stock
repurchased or already held by the Company to
grant treasury shares to employees, senior employ-
ees and/or members of the Executive Board/ma-
nagement boards of the Company or one of its
affiliates including for purposes of share transfer
programs, in particular long term incentive plans
including matching share plans or other stock
ownership plans, under exclusion of the general
purchasing possibility of shareholders (exclusion of
subscription rights). The authorization can be
exercised as a whole or in parts or even in several
tranches by the Company, by a subsidiary (section
189a number 7 Austrian Commercial Code) or by
third parties for the account of the Company.
166
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
The gains and losses recognized directly in other
comprehensive income and their related tax effects
were as follows:
Tax effects relating to each component of other comprehensive income
In EUR mn
2018
2017
Before-tax
(expense)
income
Tax
(expense)
benefit 1
Net-of-tax
(expense)
income
Before-tax
(expense)
income
Tax
(expense)
benefit 1
Net-of-tax
(expense)
income
28
195
(114)
26
(3)
(49)
6
(6)
25
146
(108)
19
340
32
7
n.a
6
(0)
2
n.a
346
32
10
n.a
9
(3)
6
n.a
n.a
n.a
552
n.a.
55
(171)2
n.a.
(171)
199
(55)
144
209
7
216
Exchange differences from
translation of foreign ope-
rations
Gains/(losses) on hedges
Remeasurement gains/(losses)
on defined benefit plans
Gains/(losses) on equity
investments
Gains/(losses) on hedges that
are subsequently transferred to
the carrying amount of the
hedged item
Share of other comprehensive
income of equity-accounted
investments
Other comprehensive income
for the year
1 Includes valuation allowances for deferred tax assets for the Austrian tax group. For further details please refer to Note 12.
2 Represent net-of-tax amounts
For 2018, the Executive Board of OMV Aktiengesell-
schaft proposed a dividend of EUR 1.75 per eligible
share, which is subject to confirmation by the
Annual General Meeting in 2019. The dividend for
2017 was paid in June 2018 and amounted to
EUR 490 mn (EUR 1.50 per share). In 2017, the
payment amounted to EUR 392 mn (EUR 1.20
per share). The interest paid for hybrid bonds
amounted EUR 86 mn (2017: EUR 137 mn).
Treasury shares
January 1, 2017
Disposals
December 31, 2017
Disposals
December 31, 2018
Number of
shares
Cost
EUR mn
824,369
(52,139)
772,230
(230,079)
542,151
9.1
(0.6)
8.5
(2.5)
6.0
167
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Number of shares in issue
January 1, 2017
Used for share-based compensations
December 31, 2017
Number of
shares
327,272,727
—
327,272,727
Treasury
shares
Shares in
issue
824,369
326,448,358
(52,139)
772,230
52,139
326,500,497
Used for share-based compensations
December 31, 2018
—
327,272,727
(230,079)
542,151
230,079
326,730,576
22 Non-controlling interests
Subsidiaries with material NCI
In EUR mn
2018
Net
income
allocated
to NCI
Accumula-
ted NCI
434
364
3,279
2,974
2017
Net income
allocated
to NCI
Accumula-
ted NCI
276
225
2,961
2,813
NCI
49%
49%
47
6
(1)
17
39
39
1
205
49%
36
198
(8)
11
96
129
49%
52%
—
49%
2
(5)
18
36
(13)
(132)
95
130
127
49%
35
129
1
74%
1
1
Place of
business
n.a.
Romania
NCI
49%
49%
Romania
49%
Kazakhstan
Kazakhstan
n.a.
n.a.
49%
49%
—
49%
Austria
49%
Austria
74%
n.a.
n.a.
—
n.a
4
477
29
3,436
—
n.a
4
315
27
3,118
Subsidiary
OMV Petrom group
OMV PETROM SA
OMV PETROM
MARKETING SRL
TASBULAT OIL
CORPORATION LLP
KOM MUNAI LLP
Others
Gas Connect group 1
GAS CONNECT
AUSTRIA GmbH
AGGM Austrian Gas
Grid Management AG
Subsidiaries with
individually immaterial
non-controlling interests
OMV GROUP
1 Includes the result of the equity accounted investment Trans Austria Gasleitung GmbH
The proportion of ownership corresponds to the
proportion of voting rights of the non-controlling
interests (NCI) in all cases.
168
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
The main activities of the OMV Petrom group are
exploration and production of hydrocarbons (in
Romania and Kazakhstan), refining of crudes (in
Romania), marketing of petroleum products (in
Romania, Bulgaria, Serbia and Moldova) and of
natural gas as well as production and the sale of
electricity (in Romania). In 2018, OMV Petrom SA
acquired the remaining 5% share in KOM MUNAI
LLP leading to an ownership of 100% (2017: 95%)
and thus the related NCI is 49% (2017: 52%).
Statement of comprehensive income
In EUR mn
GAS CONNECT AUSTRIA GmbH operates an
approximately 900 km long natural gas high-
pressure pipeline grid in Austria and markets
transportation capacity to meet domestic natural
gas demand and support export to Europe.
The following tables summarize the financial
information relating to the subsidiaries with
material non-controlling interests, before intra-
group eliminations:
Sales revenue
Net income for the year
Total comprehensive income
Attributable to NCI
Dividends paid to NCI
Statement of financial position
In EUR mn
Current assets
Non-current assets
Assets held for sale
Current liabilities
Non-current liabilities
Liabilities associated with assets held for sale
Statement of cash flows
In EUR mn
Operating cash flow
Investing cash flow
Financing cash flow
Net increase /(decrease) in cash and cash equivalents
2018
2017
GAS
CONNECT
AUSTRIA
GmbH
198
72
68
33
39
OMV
Petrom SA
3,167
460
269
132
89
GAS
CONNECT
AUSTRIA
GmbH
213
78
80
39
45
OMV
Petrom SA
3,681
831
838
410
117
2018
2017
GAS
CONNECT
AUSTRIA
GmbH
OMV
Petrom SA
GAS
CONNECT
AUSTRIA
GmbH
OMV
Petrom SA
2,004
7,640
27
1,259
1,437
22
38
684
—
388
69
—
1,649
7,492
—
991
1,790
—
41
672
—
71
366
—
2018
2017
GAS
CONNECT
AUSTRIA
GmbH
OMV
Petrom SA
GAS
CONNECT
AUSTRIA
GmbH
102
(42)
(61)
0
1,231
(579)
(230)
403
127
(40)
(86)
(0)
OMV
Petrom SA
1,379
(1,050)
(89)
240
169
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
23 Provisions
Provisions
In EUR mn
January 1, 2018
Foreign exchange differences
Changes in consolidated Group
Usage and releases
Payments to funds
Allocations
Transfers
Liabilities associated with assets held for sale
December 31, 2018
thereof short-term as of December 31, 2018
thereof short-term as of January 1, 2018
Pensions and
similar
obligations
Decom-
missioning
and
restoration
Other
provisions
1,003
(0)
4
(62)
(5)
176
(20)
(0)
1,096
—
—
3,180
5
692
(456)
—
367
—
(51)
3,736
63
110
846
2
17
(280)
—
198
20
(2)
801
355
349
Total
5,029
6
712
(798)
(5)
741
(0)
(53)
5,633
418
459
Provisions for pensions and similar obligations
The majority of pension commitments of several
Austrian OMV companies were transferred to an
external pension fund managed by APK-
Pensionskasse AG in earlier years. The pension plan
in New Zealand is operated by AMP Wealth Man-
agement New Zealand Limited, known as the New
Zealand Retirement Trust (NZTR).
Defined benefit pension plans and obligations for severance payments
In EUR mn
Present value of funded obligations
Market value of plan assets
Provision for funded obligations
Present value of unfunded obligations
Provision for unfunded obligations
Present value of obligations of severance payments
Total
2018
776
(413)
363
490
490
129
982
2017
729
(436)
293
463
463
135
891
2016
764
(453)
311
479
479
144
935
2015
728
(460)
268
497
497
150
915
2014
745
(471)
274
530
530
163
967
170
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Present value of obligations
In EUR mn
2018
2017
Pensions
Severance
Pensions
Severance
Present value of obligation as of January 1
1,191
135
1,243
Changes in the consolidated Group
Foreign exchange differences
Liabilities associated with assets held for sale
Current service cost
Interest cost
Benefits paid
Expected defined benefit obligations as per
December 31
Actual defined benefit obligations as per
December 31
Remeasurements of the period (OCI)
thereof changes in demographic assumptions
thereof changes in financial assumptions
thereof experience adjustments
23
0
—
3
20
(74)
1,164
1,266
102
96
(5)
11
—
(0)
(0)
5
3
(9)
134
129
(5)
0
(7)
1
—
0
0
3
19
(75)
1,192
1,191
(0)
—
(6)
6
144
—
(1)
—
5
2
(13)
138
135
(3)
0
(2)
(1)
Market value of plan assets
In EUR mn
Market value of plan assets
as of January 1
Changes in the consolidated
Group
Interest income
Allocation to funds
Benefits paid
Remeasurements of the
period (OCI)
Market value of plan assets
as of December 31
2018
VRG IV -
Austria
VRG VI -
Austria
New
Zealand
Total
VRG IV -
Austria
2017
VRG VI -
Austria
Total
285
151
—
436
298
155
453
—
5
—
(22)
—
2
5
(17)
20
—
—
—
20
7
5
(38)
—
5
0
(21)
—
2
9
(17)
—
7
9
(38)
(12)
(5)
—
(17)
3
1
4
256
137
20
413
285
151
436
171
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Provisions and expenses
In EUR mn
Provision as of January 1
Changes in the consolidated group
Foreign exchange differences
Liabilities associated with assets held for sale
Expense for the year
Benefits paid
Payments to funds
Remeasurements for the year
thereof changes in demographic assumptions
thereof changes in financial assumptions
thereof experience adjustments
Provision as of December 31
Current service cost
Net interest cost
Expenses of defined benefit plans for the year
2018
2017
Pensions
Severance
Pensions
Severance
756
4
0
—
16
(35)
(5)
119
96
12
11
853
3
13
16
135
—
(0)
(0)
8
(9)
—
(5)
0
(7)
1
129
5
3
8
791
—
0
0
16
(37)
(9)
(5)
—
(10)
6
756
3
12
16
144
—
(1)
—
8
(13)
—
(3)
0
(2)
(1)
135
5
2
8
In 2018, the total pension fund contributions for the
Executive Board and former members of the
Executive Board amounted to EUR 1 mn (2017:
EUR 1 mn).
Underlying assumptions for calculating pension expenses and expected
defined benefit entitlements as of December 31
Capital market interest rate
Future increases in salaries
Future increase in pensions
2018
2017
Austria and Germany
Romania
Austria and Germany
Romania
Pensions Severance Severance
Pensions Severance Severance
1.90%
3.00%
2.00%
1.60%
3.00%
—
4.75%
2.61%
—
1.70%
3.00%
1.80%
1.30%
3.00%
—
4.10%
3.15%
—
The following actuarial assumptions for calculating
pension expenses and expected defined benefit
entitlements are considered as material and are
stress tested within the following ranges. The
increase or decrease compared to the values
Sensitivities - percentage change
accounted for defined benefit obligations in relative
deviation terms and in absolute values are as
follows:
2018
Capital market interest
rate
Future increases in
salaries
+0.50%
(5.75)%
(4.09)%
(0.50)%
+0.25%
6.36%
4.36%
2.47%
2.13%
(0.25)%
(2.36)%
(2.08)%
Pensions
Severance
172
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Sensitivities - absolute change
In EUR mn
Pensions
Severance
2018
Capital market interest
rate
Future increases in
salaries
+0.50%
(0.50)%
+0.25%
(0.25)%
(73)
(5)
80
6
31
3
(30)
(3)
Duration profiles and average duration of defined benefit obligations as of December 31
In EUR mn
Pensions
Severance
Cash duration profiles and average duration as of December 31
In EUR mn
Pensions
Severance
2018
Duration profiles
Duration
1–5 years 6–10 years
>10 years
in years
342
43
278
37
646
49
12
9
2018
Duration profiles
Duration
1–5 years 6–10 years
>10 years
in years
359
50
324
55
1,158
135
14
11
Allocation of plan assets as of December 31
Asset category
Equity securities
Debt securities
Cash and money market investments
Other
Total
VRG IV -
Austria
22.14%
62.21%
6.76%
8.89%
100.00%
2018
VRG VI -
Austria
21.81%
62.48%
6.70%
9.01%
100.00%
2017
New
Zealand
VRG IV -
Austria
VRG VI -
Austria
53.63%
25.41%
15.73%
5.23%
100.00%
23.75%
61.03%
7.55%
7.67%
100.00%
24.10%
60.42%
7.68%
7.80%
100.00%
Investment policies aim to achieve an optimal
investment portfolio structure and to ensure that
existing entitlements are covered at all times. The
investment of plan assets in Austria is governed by
section 25 Austrian Pension Fund Act and the
Investment Fund Act. In addition to these regula-
tions, the investment guidelines of APK-Pensions-
kasse AG regulate the spread of asset allocation, the
use of umbrella funds and the selection of fund
managers. New categories of investments or the
employment of a wider range of funds require the
approval of the APK-Pensionskasse AG manage-
ment board. Diversification of both equity and debt
securities is global; however, the bulk of the debt
securities is EUR-denominated or EUR-hedged.
The funds of the asset allocation and risk group VRG
IV and VRG VI are invested in international equity
and bond funds, alternative investment strategies
(absolute return strategies, real estate and private
equity) as well as money market investments. The
long-term investment objective of the VRG IV and
the VRG VI is to outperform their benchmark (20%
global equity, 65% global bonds, 5% cash, 5%
alternatives, 5% real estate) and to cover existing
and future entitlement payments of the VRGs. The
173
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
assets of the VRG IV and VRG VI are invested in such
a manner as to ensure the security, quality, liquidity
and profitability of the portfolio as a whole, as
defined in the Austrian Pension Fund Act section 25.
The asset allocation and the regional allocation of
the VRG IV and VRG VI can and will deviate from the
benchmark allocation if this is in the judgment of
APK and warranted by current asset prices and/or
future expected returns. To enhance the return
potential, active strategies for all asset classes will
be used when justified by market characteristics
and/or cost/benefit considerations. The majority of
the assets of the VRG IV and VRG VI are invested in
liquid active markets for which quoted prices are
available. A smaller allocation to assets for which
only observable but not quoted prices are available
(e.g. real estate and certain absolute return strate-
gies) is allowed when the risk return profile of such
assets is believed to be favorable. Risk is managed
actively and it is generally expected that the
volatility and especially the drawdown risk of the
VRG IV and VRG VI will be lower than that of their
benchmark.
The actual returns of the individual VRGs can
deviate from the target returns on the plan assets,
due to differences in the allocation, the develop-
ments of the capital markets and costs. The
performance of the VRG IV was in 2018 (5.1)% and
the performance of the VRG VI was (4.6)% mainly
due to negative performance on debt and equity
securities market.
In 2019, defined benefit related contributions for
2018 to APK-Pensionskasse AG of EUR 50 mn are
planned.
Provisions for decommissioning and restoration obligations
Provisions for decommissioning and restoration obligations
In EUR mn
January 1, 2018
Foreign exchange differences
Changes in consolidated Group
New obligations
Increase arising from revisions in estimates
Reduction arising from revisions in estimates
Unwinding of discounting
Liabilities associated with assets held for sale
Usage and disposals
December 31, 2018
thereof short-term as of December 31, 2018
thereof short-term as of January 1, 2018
Carrying
amount
3,180
5
692
144
124
(411)
96
(51)
(44)
3,736
63
110
Changes in the consolidated Group were related to
the acquisition of Upstream assets in New
Zealand. The line new obligations was mainly
impacted by the acquisition of a 20% stake in two
offshore fields in Abu Dhabi. For further details see
Note 3.
Net change from revisions in estimates amounted
to EUR (286) mn. The reduction arising from
revisions in estimates were mainly driven by
increased discount rates for RON and USD com-
pared to 2017.
174
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Estimation of maturities of decommissioning and restoration obligations
In EUR mn
≤1 year
1 – 5 years
5 – 10 years
10 – 20 years
20 – 30 years
30 – 40 years
>40 years
Total
2018
63
374
837
1,956
298
208
1
3,736
A decrease of 1 percentage point in the real interest
rates used to calculate the decommissioning
provisions would lead to an additional provision of
EUR 356 mn (2017: EUR 242 mn).
The provision for decommissioning and restoration
costs includes obligations in respect of
OMV Petrom SA amounting to EUR 1,311 mn
(2017: EUR 1,622 mn). Part of the obligations is to be
recovered from the Romanian State in accordance
with the privatization agreement. As of Decem-
ber 31, 2018, OMV Petrom SA holds receivables
from the Romanian state related to decommis-
sioning and restoration costs amounting to
EUR 341 mn (2017: EUR 390 mn).
Other provisions
In EUR mn
Environmental costs
Onerous contracts
Other personnel provisions
Other
Other provisions
2018
2017
Short-term
Long-term
Short-term
Long-term
26
60
109
160
355
33
375
11
26
446
32
69
127
121
349
39
388
21
49
497
Other personnel provisions include short-term
costs of staff reductions amounting to EUR 30 mn
(2017: EUR 33 mn).
The provisions for onerous contracts amounting to
EUR 435 mn (2017: EUR 457 mn) are mainly related
to the Gate LNG obligation and associated transpor-
tation commitments of OMV Gas Marketing &
Trading GmbH, to reserved gas pipeline capacities
in Norway and to certain retail assets in Austria.
The provision for the Gate LNG obligation was
recorded in 2012 for a long-term, non-cancellable
contract for regasification capacity and storage that
became onerous due to the negative development
of market conditions for LNG terminal capacities in
Europe. The present value of the provision as at
December 31, 2018 was EUR 340 mn
(2017: EUR 348 mn). The provision represents the
unavoidable costs of meeting the contractual
obligations. Thereby, income and costs from future
purchases and sales of LNG are taken into account,
since the regasification of LNG and subsequent sale
of the gas positively contributes to the coverage of
the fixed costs. The volume assumptions are based
on management’s best estimates of available LNG
volumes in the future. The prices are based on
forward rates, where available. If no forward prices
are available, the prices represent management’s
best estimate of future prices, derived from current
market prices or forward rates of the preceding
period. The calculation is based on an interest rate
of 4.9% (2017: 5.2%). A 50% decrease in either LNG
volumes or margin would lead to an additional
provision of EUR 156 mn. Furthermore, a 1 percent-
age point decrease in the discount rate would lead
to an additional provision of EUR 26 mn.
As per end of 2018, the provision for the related
non-cancellable transportation commitments of
OMV Gas Marketing & Trading GmbH amounted to
EUR 68 mn (2017: EUR 62 mn). The calculation is
based on the difference between the fixed costs for
using the capacities and the net profit from usage
expected to be generated by using the capacities.
The discount rate applied is 4.9% (2017: 5.2%).
Besides the discount rates, the key assumptions are
the gas prices at the relevant gas hubs which are
based on forward rates where available and on
175
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
management’s best estimates for the remaining
contract term.
Emissions certificates
Directive 2003/87/EC of the European Parliament
and of the European Council established a green-
house gas emissions trading scheme, requiring
member states to draw up national plans to allocate
emissions certificates. Under this scheme, affected
OMV Group companies received a total of 3,213,524
free emissions certificates in 2018 (2017: 3,328,837).
The New Zealand Government established a
greenhouse gas emissions trading scheme under
the Climate Change Response Act 2002. Under this
scheme New Zealand companies are not entitled to
receive free emission certificates.
As of December 31, 2018, the total market value of
emissions certificates amounted to EUR 225 mn
(December 31, 2017: EUR 74 mn).
OMV expects to surrender in 2019 7,916,134
emissions certificates for (not yet externally verified)
emissions.
Emissions certificates
Certificates held as of January 1
Free allocation for the year
Certificates surrendered according to verified emissions for the prior year
Changes in consolidated Group
Net purchases and sales during the year
Certificates held as of December 31
2018
2017
9,091,596
9,273,402
3,213,524
(6,335,946)
2,271
3,105,973
9,077,418
3,328,837
(6,459,422)
—
2,948,779
9,091,596
As of December 31, 2018 a provision for a shortfall
of emission certificates in New Zealand in amount
of EUR 15 mn was included in Other provisions.
As of December 31, 2017 the Group was not short of
certificates.
24 Liabilities
Liabilities
In EUR mn
Bonds
Other interest-bearing debts
thereof to banks
Trade payables
Other financial liabilities
Other liabilities
Liabilities associated with assets
held for sale
Total
2018
2017
Short-term Long-term
Total Short-term Long-term
539
304
157
4,401
2,806
863
22
8,936
4,468
441
441
—
924
138
—
5,971
5,007
745
598
4,401
3,730
1,002
22
14,907
788
114
114
3,262
1,288
775
63
6,291
3,968
823
676
—
405
148
—
5,344
Total
4,757
937
790
3,262
1,693
922
63
11,635
176
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Bonds
Bonds issued
International
corporate bond
Total
Nominal
Coupon
2018
2017
Repayment Carrying amount
December 31
EUR mn
Carrying amount
December 31
EUR mn
EUR 750,000,000
EUR 500,000,000
EUR 500,000,000
EUR 500,000,000
EUR 750,000,000
EUR 500,000,000
EUR 1,000,000,000
EUR 750,000,000
EUR 500,000,000
0.60% fixed
1.75% fixed
4.375% fixed
4.25% fixed
2.625% fixed
0.75% fixed
1.00% fixed
3.50% fixed
1.875% fixed
11/19/2018
11/25/2019
02/10/2020
10/12/2021
09/27/2022
12/04/2023
12/14/2026
09/27/2027
12/04/2028
—
500
519
503
750
497
991
748
499
5,007
Bonds and other interest-bearing debts
As at December 31, 2018, OMV Group was in
compliance with all financial covenants stipulated
by the loan agreements.
Bonds and other interest-bearing debts
In EUR mn
Short-term loan financing
Short-term component of long-term financing
Total short-term
Maturities of long-term financing
2019/2018 (short-term component of long-term financing)
2020/2019
2021/2020
2022/2021
2023/2022
2024/2023 and subsequent years
Total for 2019/2018 onwards
2018
101
742
843
742
556
855
768
500
2,230
5,651
750
500
518
502
749
—
990
748
—
4,757
2017
20
882
902
882
734
588
867
781
1,822
5,674
177
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Breakdown of bonds and other interest-bearing debts by currency and interest rate
In EUR mn
2018
2017
Weighted
average
interest rate
Weighted
average
interest rate
5,386
21
5,407
147
98
245
58
43
101
2.29%
2.28%
2.29%
1.06%
3.05%
1.85%
0.38%
0.50%
0.43%
5,332
27
5,358
211
105
315
19
1
20
2.49%
2.28%
2.49%
1.72%
1.97%
1.80%
0.39%
0.50%
0.40%
Bonds and other long-term interest-bearing debts 1
Fixed rates
Total
Variable rates
Total
EUR
USD
EUR
USD
Other short-term interest-bearing debts
HUF
EUR
Total
1 Including short-term components of long-term debts
Other financial liabilities
Other financial liabilities
In EUR mn
Liabilities on derivatives designated and effective as hedging instruments
Liabilities on other derivatives
Liabilities on finance leases
Other sundry financial liabilities
Total
Liabilities on derivatives designated and effective as hedging instruments
Liabilities on other derivatives
Liabilities on finance leases
Other sundry financial liabilities
Total
The table hereafter summarizes the maturity profile
of the Group’s financial liabilities based on contrac-
tual undiscounted cash flows:
Short-term Long-term
Total
223
2,042
14
527
2,806
97
829
15
347
1,288
2018
125
410
275
114
924
2017
—
51
278
77
405
348
2,452
288
641
3,730
97
879
292
424
1,693
178
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Financial liabilities
In EUR mn
Bonds
Other interest bearing debts
Trade payables
Derivative financial liabilities
Other financial liabilities
Total
Bonds
Other interest bearing debts
Trade payables
Derivative financial liabilities
Other financial liabilities
Total
Other liabilities
Other liabilities
In EUR mn
Other taxes and social security liabilities
Payments received in advance
Contract liabilities
Other sundry liabilities
Total
Other taxes and social security liabilities
Payments received in advance
Contract liabilities
Other sundry liabilities
Total
Contract liabilities
In EUR mn
January 1, 2018
≤1 year 1 – 5 years
>5 years
Total
621
308
4,401
2,265
549
8,145
862
118
3,262
926
369
5,538
2018
2,571
448
—
535
170
3,724
2017
2,590
743
—
51
165
3,549
2,432
—
—
—
428
2,859
1,921
91
—
—
418
2,431
5,624
756
4,401
2,800
1,147
14,728
5,374
953
3,262
977
952
11,518
Short-term Long-term
Total
2018
—
3
129
6
138
2017
—
4
140
3
148
698
14
63
88
863
628
7
62
78
775
698
18
192
94
1,002
628
10
202
82
922
Carrying
amount
202
(72)
62
192
Revenue recognized that was included in the contract liability balance at the beginning of the period
Increases due to cash received, excluding amounts recognized as revenue during the period
December 31, 2018
The contract liabilities consist mainly of a non-
refundable prepayment of storage fee received from
Erdöl-Lagergesellschaftm.b.H., Lannach on the basis
of a long-term service contract.
For details on liabilities associated with assets held
for sale we make reference to Note 20.
179
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
25 Deferred tax
Deferred taxes
In EUR mn
Intangible assets
Property, plant and equipment
Inventories
Derivatives
Receivables and other assets
Deferred taxes reclassified to assets and liabilities
associated with assets held for sale
Provisions for pensions and similar obligations
Provisions for decommissioning, restoration obligations
and environmental costs
Other provisions
Liabilities
Tax impairments according section 12 (3)/2 of the
Austrian Corporate Income Tax Act (KStG)
Tax loss carryforwards
Outside basis differences
Total
Netting (same tax jurisdictions)
Deferred taxes reclassified to assets and liabilities
associated with assets held for sale
Deferred taxes as per statement of financial position
Deferred tax
assets total
Deferred tax
assets not
recognized
Deferred tax
assets
recognized
Deferred tax
liabilities
89
134
21
300
67
0
202
1,212
134
42
445
1,134
—
3,781
2018
22
47
3
—
33
—
142
27
58
16
—
1,049
—
1,396
67
87
18
300
34
0
57
1,182
76
32
445
85
—
2,385
456
1,370
33
372
74
0
16
0
11
16
—
—
8
2,357
(1,626)
(1,626)
—
759
(0)
731
180
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Deferred taxes
In EUR mn
Intangible assets
Property, plant and equipment
Inventories
Derivatives
Receivables and other assets
Deferred taxes reclassified to assets and liabilities
associated with assets held for sale
Provisions for pensions and similar obligations
Provisions for decommissioning, restoration obligations
and environmental costs
Other provisions
Liabilities
Tax impairments according section 12 (3)/2 of the
Austrian Corporate Income Tax Act (KStG)
Tax loss carryforwards
Outside basis differences
Total
Netting (same tax jurisdictions)
Deferred taxes reclassified to assets and liabilities
associated with assets held for sale
Deferred taxes as per statement of financial position
Deferred tax
assets total
Deferred tax
assets not
recognized
Deferred tax
assets
recognized
Deferred tax
liabilities
88
171
17
145
48
58
176
956
138
44
632
1,037
—
3,511
2017
21
125
4
121
16
25
130
47
80
13
95
847
—
1,524
68
46
13
25
32
33
46
909
59
31
536
191
—
1,987
332
1,015
28
111
57
2
10
0
61
27
—
—
6
1,649
(1,212)
(1,212)
(31)
744
0
437
Deferred taxes were mainly related to different
valuation methods, differences in impairments,
write-offs, depreciation and amortization as well as
different definition of costs.
In 2018 deferred taxes were mainly impacted by the
acquisition of Shell’s Upstream business in New
Zealand (please refer to Note 3 for further details).
In 2017, deferred taxes reclassified to assets and
liabilities associated with assets held for sale were
related to Pakistan disposal group and mainly
contained deferred taxes related to unused tax loss
carryforwards.
The overall net deferred tax asset position of tax
jurisdictions which suffered a tax loss either in
current or preceding year amounted to EUR 354 mn,
thereof EUR 279 mn is attributable to the Austrian
tax group (2017: EUR 368 mn, thereof Austrian tax
group EUR 274 mn).
181
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
As of December 31, 2018, OMV recognized tax loss
carryforwards of EUR 4,138 mn before allowances
(2017: EUR 3,470 mn), thereof EUR 182 mn (2017:
EUR 243 mn) are considered recoverable for
calculation of deferred taxes. Eligibility of losses for
carryforward expires as follows:
Losses for carryforward
In EUR mn
2018
2019
2020
2021
2022
2023
After 2023/2022
Unlimited
Total
Base amount
(before allowances)
thereof not recognized
2018
2017
2018
2017
—
5
5
0
198
90
3,840
4,138
27
85
28
109
14
141
3,065
3,470
—
5
5
0
107
23
3,806
3,946
22
50
28
29
94
54
2,950
3,227
As of December 31, 2018, the aggregate amount of
temporary differences associated with fully consoli-
dated and equity-accounted investments for which
deferred tax liabilities have not been recognized
amounted to EUR 4,459 mn (2017: EUR 3,728 mn).
Capital gains on disposals of investments may be
realized on various levels of the Group depending
on the structuring of potential divestments. Due to
the complexity of the group and the associated tax
implications simplifying assumptions for the
calculation have been made that aim to diminish
cascade effects.
182
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Supplementary Information on the Financial Position
26 Statement of cash flows
In 2018, the cash balance was not entirely available
for use within OMV Supply & Trading Limited,
EUR 42 mn being blocked as collateral for a
documentary letter of credit.
Significant non-cash items
In 2017, net income of the year included a loss of
EUR 1,209 mn related to the divestment of OMV
Petrol Ofisi disposal group, which was mainly
related to the reclassification (“recycling”) of FX
losses from other comprehensive income to the
income statement. This effect had been neutralized
in the cash flow statement in the line “other
changes”.
In 2018 as well as in 2017, non-cash additions to
fixed assets included mainly effects related to the
reassessment of decommissioning and restoration
obligations.
Cash flow from investing activities
For details about the cash flow effect from the Nord
Stream 2 pipeline project refer to Note 18 Financial
Changes in liabilities arising from financing activities
In EUR mn
assets and for the cash flow effect from acquisitions
and disposals to Note 3 Changes in group structure.
Cash flow from financing activities
In 2018, OMV issued a EUR 500 mn Eurobond with a
maturity date of December 4, 2028 and a
EUR 500 mn Eurobond with a maturity date of
December 4, 2023. These transactions were
reflected in the line “Increase in long-term borrow-
ings”.
The line “Repayments of long-term borrowings”
shows the repayment of a EUR 750 mn Eurobond
and a EUR 750 mn hybrid bond. Before repayment,
the hybrid bond was reclassified from equity to
financial liabilities after the Supervisory Board had
approved on March 14, 2018 that OMV exercises the
right to call the hybrid bond.
A new hybrid bond with a size of EUR 500 mn was
issued in 2018 and disclosed in the line “Increase
hybrid bonds”.
January 1, 2018
Increase in long-term borrowings
Repayments of long-term borrowings
Increase/(decrease) in short-term borrowings
Total cash flows related to financing activities
Foreign exchange difference
Reclassification of hybrid bond from equity to financial liabilities
Difference interest expenses and interest paid
Other changes
Total non-cash changes
2018
Other
interest-
bearing
debts
937
17
(293)
102
(175)
(35)
—
3
14
(17)
Bonds
4,757
994
(1,500)
—
(506)
—
800
(0)
—
800
Finance
lease
liabilities
292
—
(11)
—
(11)
(0)
—
—
81
8
Total
5,986
1,011
(1,805)
102
(692)
(35)
800
3
22
791
Coupon payment of hybrid bond before reclassification from
equity 2
(45)
—
—
(45)
December 31, 2018
5,007
745
288
6,040
1 Mainly related to new lease agreements
2 Shown in the line "Dividends paid to OMV equity holders" in the Statement of Cash Flows
183
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Changes in liabilities arising from financing activities
In EUR mn
January 1, 2017
Increase in long-term borrowings
Repayments of long-term borrowings
Increase/(decrease) in short-term borrowings
Total cash flows related to financing activities
Foreign exchange difference
Difference interest expenses and interest paid
Other changes
Total non-cash changes
2017
Other
interest-
bearing
debts
1,234
Finance
lease
liabilities
278
Bonds
3,763
989
—
—
989
—
5
—
5
12
(202)
(89)
(279)
(50)
(1)
34
(17)
—
(15)
—
(15)
(1)
—
30 1
29
Total
5,275
1,001
(217)
(89)
695
(51)
4
64
16
December 31, 2017
4,757
937
292
5,986
1 Mainly related to new lease agreements
As of December 31, 2018, the Group had available
EUR 3,264 mn of undrawn committed borrowing
facilities that can be used for future activities
without any restrictions (December 31, 2017:
EUR 3,538 mn).
As of December 31, 2018, there were EUR 351 mn
financing commitments provided to Nord Stream 2
AG for the planned additional funding of Nord
Stream 2 project (December 31, 2017: EUR 626 mn).
184
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
27 Contingent liabilities
OMV recognizes provisions for litigations if these
are more likely than not to result in obligations.
Management is of the opinion that litigations, to the
extent not covered by provisions or insurance, will
not materially affect the Group’s financial position.
mined until performance of specialized studies in
order to establish the degree of contamination, if
any; consequently, no provision has been booked
by the company in this respect.
The production facilities and properties of all Group
companies are subject to a variety of environmental
protection laws and regulations in the countries
where they operate. The estimated cost of known
environmental obligations has been provided in
accordance with the Group’s accounting policies.
Provisions for decommissioning and restoration are
recognized if an obligation exists at the statement of
financial position date.
Management believes that compliance with current
laws and regulations and future more stringent laws
and regulations will not have a material negative
impact on the Group’s results, financial position or
cash flows in the near future.
In Romania, group activities related to refining of
petroleum products could lead to obligations
related to soil remediation activities, depending on
the requirements of environmental agencies, when
these activities are closed. With reference to
Arpechim refinery site, at the date of these financial
statements, contamination existence and a reliable
estimation of the amount required to settle a
potential remediation obligation cannot be deter-
In May 2009, OMV signed an agreement with the
sellers Crescent Petroleum Company International
and Dana Gas PJSC to acquire a 10% share in Pearl
Petroleum Company Limited (Pearl), a company that
operates Khor Mor and Chemchemal gas fields in
the Kurdistan Region of Iraq. The agreement
included contingent payments to be made by OMV
which are dependent on further reserves determina-
tions. The reserves determinations will have to be
made by a jointly appointed independent expert.
Until recently, the likelihood of incurring additional
payments was assessed to be remote. Currently
Pearl is drilling appraisal wells in the aforemen-
tioned fields, which could become the basis of
potential Field Development Plans (FDP) for these
fields. These plans will be subject to approval by
Pearl Shareholders and Government of Kurdistan
Region of Iraq. Depending on further progress, the
timing and the availability of the required approvals
and on the reserves determinations in these
approved FDP’s, a contingent payment could
potentially arise. At the date of these financial
statements, a reliable estimate of the potential
additional payment, if any, cannot be made.
Therefore, no provision has been recognized in
OMV Group’s financial statements.
28 Risk management
Capital risk
OMV’s financial steering framework is built upon
the principles of operational efficiency, capital
efficiency, financing efficiency and sustainable
portfolio management. With the focus on strength-
ening OMV’s balance sheet, delivering a positive
free cash flow and growing its profitability, the
financial steering framework represents sustainable,
risk-monitored and future-oriented value creation
for OMV and its stakeholders.
OMV manages its capital structure to safeguard its
capital base in order to preserve investor, creditor
and market confidence, as well as to provide a
sustainable financial foundation for the future
operational development of the Group. OMV’s
financing strategy focuses on cash flow and
financial stability. Principal targets are a positive
free cash flow after dividends and a strong invest-
ment grade credit rating on the basis of a healthy
balance sheet and a long-term gearing ratio of
below 30%.
185
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Capital Management – key performance measures
In EUR mn
Bonds
Other interest-bearing debts
Liabilities on finance leases
Debt
Cash and cash equivalents 1
Net Debt
Equity
Gearing Ratio 2
1 Including cash reclassified to “held for sale”
2 With the implementation of IFRS 16 on January 1, 2019 the Gearing Ratio will be 18%.
2018
5,007
745
288
6,040
4,026
2,014
15,342
13%
2017
4,757
937
292
5,986
3,981
2,005
14,334
14%
Liquidity risk
For the purpose of assessing liquidity risk, yearly
budgeted operating and financial cash flows of the
Group are monitored and analyzed on a monthly
basis. Thus, every month the Group generates a
forecasted net change in liquidity which is then
compared to the total month end balances of
money market deposits and loans as well as
maturities of the current portfolio and the available
liquidity reserves of the same month. This analysis
provides the basis for financing decisions and
capital commitments.
To ensure that OMV Group remains solvent at all
times and retains the necessary financial flexibility,
liquidity reserves in the form of committed credit
lines and short term uncommitted money market
lines are maintained. As of December 31, 2018, the
average weighted maturity of the Group’s debt
portfolio has been 5.0 years (as of December 31,
2017: 4.8 years).
OMV Group’s operational liquidity management is
done centrally via a cash pooling system, which
enables optimum use of existing cash and liquidity
reserves to the benefit of every individual member
of cash pooling system and therefore the Group as
a whole.
Details of OMV Group’s financial liabilities are
shown in Note 24.
Political Risk
OMV operates and has financial investments in
countries that are subject to political uncertainties –
in particular, Libya, Kazakhstan, Yemen, Pakistan,
Russia, Tunisia and Turkey. Possible political changes
may lead to disruptions and limitations in produc-
tion as well as an increased tax burden, restrictions
on foreign ownership or even nationalization of
property. However, OMV has extensive experience
in the political environment in Central, Eastern and
Southeastern Europe, and political developments in
all markets where OMV operates are kept under
constant observation. Country-specific risks are
assessed before entering new countries.
An analysis to assess the potential impact of a hard
Brexit scenario on OMV group companies was
undertaken, which showed that there is no signifi-
cant impact expected. OMV evaluates the risk of
potential US or EU sanctions and their impact on
planned or existing operations with the aim to stay
in full compliance with all applicable sanctions. In
particular risks due to US sanctions on the Nord
Stream 2 project and on OMV’s activities in Russia
are regularly assessed and monitored.
Market risk
Derivative and non-derivative instruments are used
to manage market price risks resulting from
changes in commodity prices, foreign exchange
rates and interest rates, which could have a
negative effect on assets, liabilities or expected
future cash flows.
Commodity price risk - Upstream
In order to protect the Group's result and cash flow
from the potential negative impact of falling oil and
gas prices as well as to ensure sufficient liquidity
headroom in order to enable the envisaged growth
strategy, OMV uses financial derivatives to secure
favorable oil and gas prices from time to time. When
doing so, OMV enters into derivative positions
selling forward parts of its future production,
thereby locking in future oil and gas prices and
reducing exposure to market prices in the periods
for which the hedges are concluded. OMV Group
adopts a flexible approach to monetize hedges prior
to their maturity with the aim to generate a positive
contribution to the results.
186
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
In 2018, in addition to already existing financial oil
and gas swaps, further swaps for gas volumes and
options for oil volumes were entered into, resulting
in a total Operating result impact of EUR (219) mn
(oil: EUR (98) mn, gas: EUR (121) mn).
In 2017, the financial swaps that were concluded for
both oil and gas volumes resulted in a total Operat-
ing result impact of EUR (72) mn (oil: EUR (128) mn,
gas: EUR 56 mn).
For these derivative instruments no hedge account-
ing was applied.
Commodity price risk – Downstream
Commodity price risk management in Downstream
refers to analysis, assessment, reporting and
hedging of market price risk exposure arising from
non-trading and trading activities, covering refining
(refinery margin, petrochemical margin, inventories
up to a defined threshold) as well as oil & gas
marketing activities (marketing margin, inventories
up to a defined threshold) and producing power
(spark spreads) in addition to proprietary trading
positions.
Limited proprietary trading activities are performed
for the purpose of creating market access within the
oil, power and gas markets. In Downstream Gas,
OTC swaps, options, futures and forwards are used
to hedge purchase and sales price risks. The aim is
to hedge the price risk on inventory fluctuations and
the differences in terms and conditions of purchases
and sales.
In Downstream Oil, derivative instruments are used
for both hedging selected product sales and
reducing exposure to price risks on inventory
fluctuations. Crude oil and product swaps are used
to hedge the refining margin (crack spread), which
is the difference between crude oil prices and bulk
product prices.
Furthermore, exchange-traded oil futures as well as
OTC contracts (contracts for difference and swaps)
are used to hedge short-term purchase and sales
market price risks.
Swaps do not involve an investment at the time the
contracts are concluded; settlement normally takes
place at the end of the quarter or month. The
premiums on options are payable when the contract
is concluded; where options are exercised, payment
of the difference between strike price and average
market price for the period takes place at contract
expiration.
The tables hereafter show the fair values of deriva-
tive financial instruments together with their
notional amounts. The notional amount, recorded
gross, is the amount of a derivative’s underlying
asset, reference rate or index and is the basis upon
which changes in the value of derivatives are
measured. The notional amounts indicate the
volume of the transactions outstanding at the year-
end and are not indicative of either the market risk
or the credit risk.
187
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Nominal and fair value of open commodity contracts
In EUR mn
Derivatives at FVOCI – Cash flow
hedging
Downstream Oil swaps 1
Derivatives at FVTPL
Upstream Oil swaps
Upstream Gas swaps
Upstream
Downstream Oil futures
Downstream Oil-Swaps
Downstream Oil
Downstream Gas options
Downstream Gas swaps
Downstream Gas futures
Downstream Gas forwards
Downstream Gas
1 Including inefficient part of cash flow hedges
2018
2017
Nominal
Fair value
assets
Fair value
liabilities
Nominal
Fair value
assets
Fair value
liabilities
4,284
391
(351)
1,417
97
(97)
—
705
705
12,282
11,063
23,345
—
329
195
16,737
17,260
—
39
39
—
(75)
(75)
1,202
202
1,404
(1,181)
(224)
(1,405)
—
15
4
905
925
—
(35)
(11)
(910)
(957)
859
961
1,820
7,860
5,589
13,449
1
162
77
8,136
8,376
—
41
41
358
38
397
0
5
2
287
295
(128)
(27)
(155)
(358)
(41)
(400)
(0)
(5)
(2)
(314)
(321)
Foreign exchange risk management
OMV operates in many countries and currencies,
therefore industry-specific activities and the
corresponding foreign exchange rate risks need to
be analyzed precisely. The USD represents OMV’s
biggest risk exposure, in the form of movement of
the USD against the EUR and also against other
main OMV currencies (RON, RUB, NOK and NZD).
Movements of these currencies against the EUR are
also important sources of risk. Other currencies
have only a limited impact on cash flow and
Operating result. The transaction risk on foreign
currency cash flows is monitored on an ongoing
basis. The Group’s net position is reviewed at least
on a semiannual basis and the sensitivity is
calculated. This analysis provides the basis for
management of transaction risks on currencies.
Since OMV produces commodities that are mainly
traded in USD, OMV Group has an economic USD
long position.
FX Forwards and swaps are used exclusively to
hedge foreign exchange rate risks on outstanding
receivables and payables. The market value of these
instruments will move in the opposite direction to
the value of the underlying receivable or liability if
the relevant foreign exchange rate changes.
As of December 31, the value of transactions used
to hedge foreign currency receivables and liabilities
and of transactions used to manage liquidity was as
follows:
2018
2017
Fair value
assets
Fair value
liabilities
Nominal
Fair value
assets
Fair value
liabilities
1
16
0
—
(12)
—
334
168
1
1
(5)
0
Nominal
238
1,701
65
Currency derivatives
In EUR mn
Currency Options (FVOCI)
Currency forwards (FVTPL)
Currency swaps (FVTPL)
188
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Cash flow hedge accounting
In the Downstream Oil Business, OMV is especially
exposed to volatile refining margins and inventory
risks. In order to mitigate those risks corresponding
hedging activities are taken, which include margin
hedges as well as stock hedges.
formed the largest risk component of the stock
price, however in some cases also oil products are
used for stock hedges. In such cases, Platts product
price is used as the risk component. Other compo-
nents like product crack spreads and other local
market cost components are not hedged.
The risk management strategy is to harmonize the
pricing of product sales and purchases in order to
remain within an approved range of priced stocks at
all times, by means of undertaking stock hedges so
as to mitigate the price exposure. The range is a
defined maximum deviation from the target stock
level, as defined in the Annual Plan for hedging
activities.
Furthermore, in respect of refinery margin hedges,
crude oil and products are hedged separately, with
the aim to protect future margins. Endorsed
mandates are documented and defined within the
Annual plan for hedging activities.
Stock hedges are used to mitigate price exposure
whenever actual priced stock levels deviate from
target levels. Forecast sales and purchase transac-
tions for crude oil and oil products are designated
as the hedged item. Historically, Brent crude oil has
In case of refinery margin hedges only the product
crack spread is designated as the hedged item,
buying Brent Crude Oil on a fixed basis and selling
the product on a fixed basis. The crack spread for
different products is a separately identifiable
component and can therefore represent the specific
risk component designated as hedged item. There
are limits set for the volume of planned hedged
sales to avoid over hedging.
The hedging relationships are established with a
hedge ratio of 1:1 as the underlying risk of the
commodity derivatives are identical to the hedged
risk components. Hedge ineffectiveness can arise
from timing differential between derivative and
hedge item delivery and pricing differentials
(derivatives are valued on the future monthly
average price (or other periods) and
sales/purchases on the pricing at the date of
transaction/delivery).
Cash flow hedging – impact of hedging on the statement of financial positions
In EUR mn
2018
Swaps fix to
floating –
forecast
purchase
Swaps fix to
floating –
forecast sales
Commodity price risk
204
204
—
—
44
other financial
assets/liabilities
4,080
2,336
1,744
391
304
other financial
assets/liabilities
Option - firm
commitment to
acquire a
business in a
business
combination
Foreign
currency risk
238
238
—
1
—
other financial
assets/liabilities
(44)
—
94
—
(2)
(2)
Nominal Value
Below one year
More than one year
Fair value – assets
Fair value – liabilities
Line item in the statement of financial
position
Cash flow hedge reserve (before
taxes)
thereof cost of hedging reserve
Total
4,522
2,778
1,744
392
348
n.a.
49
(2)
189
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Cash flow hedging – effect of hedging in the statement of profit or loss and other comprehensive income
In EUR mn
2018
Forward -
firm
commitment
to acquire a
business in a
business
combination
Option - firm
commitment
to acquire a
business in a
business
combination
Swaps fix to
floating –
forecast
purchase
Swaps fix to
floating –
forecast
sales
Commodity price risk
Foreign currency risk
Gains/(losses) of the period
recognized in OCI
Hedge ineffectiveness recognized
in profit or loss
Line item in the statement of
profit or loss (hedge ineffective-
ness)
Amount reclassified from OCI to
profit or loss
Line item in the statement of
profit or loss (recycling)
(21)
(1)
Purchases
(net of
inventory
variation)
—
n.a.
43
(14)
Sales
revenues
152
Sales
revenues
32
—
n.a.
—
n.a.
(2)
—
n.a.
—
n.a.
Cash flow hedging – Impact of hedging on equity
In EUR mn
2018
Forward -
firm
commitment
to acquire a
business in
a business
combination
Option - firm
commitment
to acquire a
business in a
business
combination
Swaps fix
to floating –
forecast
purchase
Swaps fix to
floating –
forecast
sales
Cash flow hedge reserve as of
January 1 (net of tax)
Gains/(losses) of the period
recognized in OCI
Amounts reclassified to profit or loss
Amounts transferred to cost of non-
financial item
Tax effects
Cash flow hedge reserve as of
December 31 (net of tax)
Commodity price risk
Foreign currency risk
81
(21)
—
(132)
40
(33)
(72)
43
152
—
(50)
73
—
32
—
(32)
—
—
—
(2)
—
—
0
(1)
Total
52
(15)
n.a.
152
n.a.
Total
8
52
152
(163)
(10)
39
190
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Cash flow hedging for commodities
In EUR mn
Downstream Oil price risk hedge
Swaps fix to floating – Brent
Swaps fix to floating – products
2017
Period of
expected
cash flows
for cash flow
hedges
Adjustments
from cash
flow hedges
in other
comprehen-
sive income
thereof:
Transfer
from other
comprehen-
sive income
disclosed in
income
statement
until Q4/18
until Q4/18
99
(66)
(5)
23
Sensitivity analysis
For open hedging contracts sensitivity analysis is
performed to determine the effect of market price
fluctuations (+/–10%) on market value. The sensitivi-
ty of OMV Group’s overall earnings differs from the
sensitivity shown below, since the contracts
concluded are used to hedge operational expo-
sures.
The effect of market price fluctuations on earnings
or equity depends on the type of derivative used
and on whether hedge accounting is applied.
Market price sensitivity for derivatives to which
cash flow hedge accounting is applied is shown in
the sensitivity table for equity. Sensitivity to market
price fluctuations for all other open derivatives is
shown in the sensitivity tables for profit before tax.
Sensitivity analysis for open derivatives affecting profit before tax
In EUR mn
Upstream
Upstream Commodity Oil swaps
Upstream Commodity Gas swaps
Downstream
Downstream Oil
Downstream Oil Commodity futures
Downstream Oil Commodity swaps
Downstream Gas
Downstream Gas Commodity swaps
Downstream Gas Commodity futures
Downstream Gas Commodity forwards
2018
2017
Market
price +10%
Market price
(10)%
Market
price +10%
Market price
(10)%
—
(40)
6
(2)
1
4
(51)
—
40
(6)
2
(1)
(4)
51
(99)
(34)
6
9
(5)
0
(34)
99
34
(6)
(9)
5
(0)
34
Sensitivity analysis for open derivatives affecting equity
In EUR mn
Downstream Oil
Downstream Oil Commodity swaps
26
(26)
(7)
7
2018
2017
Market
price +10%
Market price
(10)%
Market
price +10%
Market price
(10)%
For financial instruments, sensitivity analysis is
performed for changes in foreign exchange rates.
On Group level, the EUR-RON sensitivity not only
includes the net RON exposure versus the EUR but
also the net RON exposure versus the USD, since
the USD-RON exposure can be split into a EUR-RON
and EUR-USD exposure. The same is true for the
EUR-NOK and EUR-NZD exposure.
191
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Sensitivity analysis for financial instruments affecting profit before tax 1
In EUR mn
EUR-RON
EUR-USD
EUR-NZD
EUR-NOK
2018
2017
10%
apprecia-
tion of the
EUR
10%
deprecia-
tion of the
EUR
10%
apprecia-
tion of the
EUR
10%
deprecia-
tion of the
EUR
(4)
(48)
9
14
4
48
(9)
(14)
15
(43)
2
12
(15)
43
(2)
(12)
1 Refers only to financial instruments and is not the same as the Group’s overall foreign exchange rate sensitivity in terms of operating result
Translation risk
Translation risk is also monitored on an ongoing
basis at Group level, and the risk position is
evaluated. Translation risk arises on the consolida-
tion of subsidiaries with functional currencies
different from EUR. The largest exposures result
from changes in RON, USD, RUB, NOK and NZD
denominated assets against the EUR.
Interest rate management
To facilitate management of interest rate risk,
OMV’s liabilities are analyzed in terms of fixed and
floating rate borrowings, currencies and maturities.
Appropriate ratios for the various categories are
established, and where necessary, derivative
instruments are used to hedge fluctuations outside
predetermined ranges.
Interest rate swaps can be used to convert fixed rate
debt into floating rate debt, and vice versa. As of
December 31, 2018, OMV did not have any open
position, since no interest rate swaps were entered
during the year 2018 (2017: no open position).
Interest sensitivities
OMV Group holds financial assets whose market
value would be affected by changes in interest
rates. The effect of an interest rate increase of 0.5
percentage points on the main financial assets as of
December 31, 2018, would have been a EUR 30 mn
reduction in the market value of these financial
assets (2017: EUR 35 mn). A 0.5 percentage points
fall in the interest rate as of December 31, 2018
would have led to an increase in market value of
EUR 31 mn (2017: EUR 37 mn).
OMV regularly analyzes the impact of interest rate
changes on interest income and expense from
floating rate deposits and borrowings. Currently the
effects of changes in interest rate are not consid-
ered to be a material risk.
Credit risk management
The main counterparty credit risks are assessed and
monitored at Group level and Segment level using
predetermined criteria and limits for all counterpar-
ties, banks and security providers. On the basis of a
risk assessment, counterparties, banks and security
providers are assigned a credit limit, an internal risk
class and a specific limit validity. The risk assess-
ments are reviewed at least annually or on an ad-
hoc basis. The credit risk processes are governed by
guidelines at OMV Group level stipulating the
group-wide minimum requirements. The main
counterparties with contracts involving derivative
financial instruments have investment grade credit
ratings.
Credit risk is the risk that OMV Group’s counterpar-
ties will not meet their obligation under a financial
instrument or customer contract, leading to a
financial loss. The Group is exposed to credit risk
arising from credit exposures with customer
accounts receivables (see Note 18), from its
operating activities as well as from its financial
activities such as financial investments, including
deposits with banks and financial institutions (see
Note 26), foreign exchange transactions and other
financial instruments (see Note 18).
192
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
29 Fair value hierarchy
Fair value hierarchy of financial assets and assets held for sale 2018
In EUR mn
Carrying amount
Fair value level
At
amortized
cost
At fair
value
Total
Level 1
Level 2
Level 3
Total
Trade receivables
Investments in other
companies designated as at
FVOCI 1
Investment funds
Bonds 2
Derivatives designated and
effective as hedging
instruments
Other derivatives
Loans
Other sundry financial
assets 3
Net amount of assets and
liabilities associated with
assets held for sale
Total
3,338
82
3,420
82
—
82
—
—
6
—
21
6
—
21
6
78
—
—
—
392
2,384
—
392
2,384
671
—
1,206
—
392
1,178
—
—
—
78
—
—
671
21
—
—
—
—
—
21
6
—
392
2,384
—
1,107
725
1,833
—
—
725
725
n.a.
5,195
—
3,610
—
8,805
—
1,212
—
1,651
—
747
—
3,610
1 Upon implementation of IFRS 9, the classification of equity investments changed to Fair Value through OCI. Please see Note 2 for further details.
2 Upon implementation of IFRS 9, the classification of bonds changed to Amortized Costs. Please see Note 2 for further details.
3 Includes an asset from reserves redetermination rights related to the acquisition of interests in the field Yuzhno Russkoye and contingent
considerations from the divestments of the 30% stake in the field Rosebank and of OMV (U.K.) Limited. Please see Note 18 for further details.
Fair value hierarchy of financial liabilities 2018
In EUR mn
Carrying amount
Fair value level
At
amortized
cost
5,007
745
4,401
At fair
value
—
—
—
Total
5,007
745
4,401
Level 1
Level 2
Level 3
Total
—
—
—
—
—
—
Bonds
Other interest bearing debt
Trade payables
Liabilities on derivatives
designated and effective as
hedging instruments
Liabilities on other
derivatives
Liabilities on finance lease
Other sundry financial
liabilities
Total
—
348
348
—
348
—
288
641
11,083
2,452
—
—
2,800
2,452
288
641
13,883
1,192
—
—
1,192
1,260
—
—
1,608
—
—
—
—
—
—
—
—
—
—
—
348
2,452
—
—
2,800
193
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Financial assets and liabilities for which fair values are disclosed 2018
In EUR mn
Fair Value
Fair value level
Level 1
Level 2
Level 3
Bonds
Financial assets
Bonds
Other interest bearing debt
Liabilities on finance lease
Financial liabilities
77
77
5,323
759
386
6,467
5
5
5,323
—
—
5,323
72
72
—
759
386
1,144
Fair value hierarchy of financial assets including assets held for sale 2017
In EUR mn
Carrying amount
Fair value level
Trade receivables
Investments in other
companies
Investment funds
Bonds
Derivatives designated and
effective as hedging
instruments
Other derivatives
Loans
Other sundry financial
assets 1
Net amount of assets and
liabilities associated with
assets held for sale
Total
At
amortized
cost
2,503
39
—
—
—
—
348
At fair
value
—
—
6
78
97
732
—
Total
2,503
39
6
78
97
732
348
1,018
780
1,798
n.a.
3,908
2
1,695
2
5,604
—
—
6
5
—
360
—
—
—
371
Level 1
Level 2
Level 3
—
—
—
73
97
372
—
—
—
—
—
—
—
—
—
780
—
—
—
—
—
—
Total
—
—
6
78
97
732
—
780
—
542
2
782
2
1,695
1 Includes an asset from reserves redetermination rights related to the acquisition of interests in the field Yuzhno Russkoye and contingent
considerations from the divestments of the 30% stake in the field Rosebank and of OMV (U.K.) Limited. Please see Note 18 for further details.
194
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Fair value hierarchy of financial liabilities 2017
In EUR mn
Carrying amount
Fair value level
At
amortized
cost
At fair
value
Bonds
Other interest bearing debt
Trade payables
Liabilities on derivatives
designated and effective as
hedging instruments
Liabilities on other
derivatives
Liabilities on finance lease
Other sundry financial
liabilities
Total
4,757
937
3,262
—
—
292
424
9,672
—
—
—
97
879
—
—
977
Total
4,757
937
3,262
97
879
292
424
10,649
Level 1
Level 2
Level 3
Total
—
—
—
—
360
—
—
360
—
—
—
97
519
—
—
616
—
—
—
—
—
—
—
—
—
—
—
97
879
—
—
977
Financial liabilities for which fair values are disclosed 2017
In EUR mn
Bonds
Other interest bearing debt
Liabilities on finance lease
Financial liabilities
Fair Value
Fair value level
Level 1
Level 2
Level 3
5,169
981
399
6,549
5,169
—
—
5,169
—
981
399
1,380
—
—
—
—
30 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset
only when the Group has a current and legally
enforceable right to set-off the recognized amounts
and when there is an intention to settle on a net
basis or realize the asset and settle the liability
simultaneously.
OMV enters in the normal course of business into
various master netting arrangements in the form of
International Swaps and Derivatives Association
(ISDA) agreements or European Federation of
Energy Traders (EFET) agreements or other similar
arrangements that do not meet the criteria of
offsetting in the statement of the financial position
in accordance with IAS 32.
The tables hereafter show the carrying amounts of
recognized financial assets and financial liabilities
that are subject to various netting arrangements.
The net column would be on the Group’s statement
of financial position, if all set-off rights were
exercised.
195
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Offsetting of financial assets
In EUR mn
Note
18
18
18
Derivative financial
instruments
Trade receivables
Other sundry financial assets
Total
Offsetting of financial liabilities
In EUR mn
2018
Amounts set
off in the
statement of
financial
position
Financial
instruments in
the statement
of financial
position (net)
Liabilities
with right of
set-off (not
offset)
Financial
instruments
(gross)
2,776
3,451
1,837
8,065
—
(31)
(4)
(36)
2,776
3,420
1,833
8,029
(2,446)
(1,656)
(27)
(4,129)
Net
330
1,764
1,806
3,900
2018
Amounts set
off in the
statement of
financial
position
Financial
instruments in
the statement
of financial
position (net)
—
(31)
(4)
(36)
2,800
4,401
1,147
8,349
Note
24
24
24
Financial
instruments
(gross)
2,800
4,432
1,152
8,385
Assets with right
of set-off (not
offset)
(2,471)
(1,656)
(2)
(4,129)
Net
329
2,745
1,145
4,220
2017
Amounts set
off in the
statement of
financial
position
Financial
instruments in
the statement
of financial
position (net)
—
—
(2)
(2)
829
2,503
1,793
5,126
Note
18
18
18
Financial
instruments
(gross)
829
2,503
1,795
5,127
Liabilities with
right of set-off
(not offset)
(748)
(892)
(31)
(1,671)
Net
82
1,611
1,762
3,455
2017
Amounts set
off in the
statement of
financial
position
Financial
instruments in
the statement
of financial
position (net)
—
—
(2)
(2)
977
3,262
424
4,663
Financial
instruments
(gross)
977
3,262
426
4,665
Note
24
24
24
Assets with right
of set-off (not
offset)
(777)
(892)
(2)
(1,671)
Net
200
2,371
422
2,992
Derivative financial instruments
Trade payables
Other sundry financial liabilities
Total
Offsetting of financial assets
In EUR mn
Derivative financial instruments
Trade receivables
Other sundry financial assets
Total
Offsetting of financial liabilities
In EUR mn
Derivative financial instruments
Trade payables
Other sundry financial liabilities
Total
196
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
31 Result on financial instruments
Result on financial instruments
In EUR mn
Fair value
through profit
or loss
Amount
Equity
instruments
designated as
at fair value
through other
comprehensive
income
2018
Financial
assets at
amortized cost
Financial
liabilities at
amortized cost
Fair value changes of financial
assets and derivatives
Net impairment losses on financial
assets
Result on financial instruments
within operating result
(321)
(321)
(13)
—
(334)
(321)
Dividend income
Interest income
Interest expense
Expenses on the sales of trade
receivables
Impairments of financial
instruments, net
Other (mainly banking fees)
Result on financial instruments
within financial result
Result on financial instruments
In EUR mn
20
117
(290)
(31)
1
(30)
(214)
—
8
—
(31)
—
—
(23)
—
—
—
20
—
—
—
—
—
20
—
(13)
(13)
—
108
—
—
1
—
—
—
—
—
—
(131)
—
—
(30)
109
(161)
Fair value
through profit
or loss
Available-for-
sale financial
instruments
Loans and
receivables
Liabilities
measured at
amortized cost
Amount
Fair value changes of financial
assets and derivatives
Net impairment losses on financial
assets
Result on financial instruments
within operating result
(135)
(102)
(18)
—
2017
(32)
—
—
(18)
(153)
(102)
(32)
(18)
Dividend income
Interest income
Interest expense
Results from the disposal of
other investments
Impairments of financial
instruments, net
Expenses on the sales of trade
receivables
Other (mainly banking fees)
Result on financial instruments
within financial result
15
64
(265)
4
—
(27)
(11)
(220)
—
—
—
—
—
—
—
—
15
—
—
4
(1)
—
—
19
—
60
—
—
—
(27)
—
34
—
—
—
—
—
(124)
—
—
—
(12)
(136)
197
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
The interest expense not allocated mainly refers to
the unwinding of provisions in amount of
EUR 149 mn (2017: EUR 133 mn).
32 Share based payments
Long Term Incentive (LTI) plans
LTI plans with similar conditions have been granted
to the Executive Board and selected senior execu-
tives in the Group yearly. At vesting date, bonus
shares will be granted to the participants. The
number of bonus shares is determined depending
on the achievement of defined performance targets.
Disbursement is made in cash or in shares. From
2011 till 2015, participation to the plan also was
granted to selected employees with outstanding
development potential (potentials). Executive Board
members and senior executives as active partici-
pants of the plans are required to build up an
appropriate volume of shares and to hold those
shares until retirement or departure from the
Company. The shareholding requirement is defined
as a percentage of the annual gross base salary, for
Executive Board members the requirement needs to
be fulfilled five years after the initial respective
appointment. Until fulfillment of the shareholding
requirement the disbursement is in form of shares
whilst thereafter the plan participants can decide
between cash or share settlement. As long as the
shareholding requirements are not fulfilled the
granted shares after deduction of taxes are trans-
ferred to a trustee deposit, managed by the
Company.
For share-based payments the grant date fair values
are spread as expenses over the three years
performance period with a corresponding increase
in shareholders’ equity. In case of assumed cash-
settlements a provision is made for the expected
future costs of the LTI plans at statement of financial
position date based on fair values.
Long Term Incentive Plans
Start of plan
End of performance
period
Vesting date
Shareholding requirement
Executive Board Chairman
Executive Board Deputy
Chairman
Executive Board members
Senior executives
Expected bonus shares as
of December 31, 2018
Maximum bonus shares as
of December 31, 2018
Fair value of plan (in EUR
mn) as of December 31,
2018
Provision (in EUR mn) as
of December 31, 2018
Estimated tax payments
related to equity settled
transactions (in EUR mn) 1
2018 plan
1/1/2018
12/31/2020
3/31/2021
2017 plan
1/1/2017
12/31/2019
3/31/2020
2016 plan
1/1/2016
12/31/2018
3/31/2019
2015 plan
1/1/2015
12/31/2017
3/31/2018
200% of gross
base salary
175% of gross
base salary
150% of gross
base salary
75% of gross base
salary
200% of gross
base salary
175% of gross
base salary
150% of gross
base salary
75% of gross base
salary
200% of gross
base salary
175% of gross
base salary
150% of gross
base salary
75% of gross base
salary
200% of gross
base salary
175% of gross
base salary
150% of gross
base salary
75% of gross base
salary
180,687 shares
392,978 shares
733,322 shares
273,302 shares
420,518 shares
869,228 shares
7
2
1
16
7
2
30
19
5
—
—
—
—
—
1 This position includes estimated tax obligations of participants of the plan associated with equity settled transactions of the whole plan. This amount is
paid by OMV in cash to the tax authority on behalf of participants after vesting date.
198
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Personal investment held in shares
Active executive Board
members
Seele
Pleininger 1
Florey
Leitner
Former executive Board
members 2
Davies
Floren
Huijskes
Roiss
Total — Executive Board
Other senior executives 2
Total personal investment
12/31/2018
12/31/2017
12/31/2016
12/31/2015
70,890 shares
28,511 shares
13,401 shares
65,245 shares
48,435 shares
19,333 shares
8,335 shares
59,335 shares
38,038 shares
12,979 shares
—
51,249 shares
32,200 shares
8,462 shares
—
37,163 shares
—
—
—
—
178,047 shares
299,997 shares
478,044 shares
—
—
—
—
135,438 shares
256,202 shares
391,640 shares
—
—
—
81,831 shares
184,097 shares
317,840 shares
501,937 shares
54,626 shares
31,929 shares
38,419 shares
80,600 shares
283,399 shares
287,397 shares
570,796 shares
1 Johann Pleininger also took part in the 2015 plan in his position as senior executive.
2 Personal investment of former executive Board members and other senior executives are only included if shares are held in the OMV trustee deposit.
Equity Deferral
The Equity Deferral (equity part of the Annual
Bonus, previously OMV Share Part of the Annual
Bonus) serves as a long-term compensation vehicle
for the members of the Executive Board that
promotes retention and shareholder alignment in
OMV, combining the interests of management and
shareholders via a long-term investment in restrict-
ed shares. The plan also seeks to prevent inade-
quate risk-taking.
The Annual Bonus is capped at 180% of the target
Annual Bonus (until 2017: 200% of the annual gross
salary). One third of the Annual Bonus (until 2017:
50% of the granted Annual Bonus) is granted in
shares. The determined bonus achievement is
settled per March 31 following the period end
whereby at the statement of financial position date
Expenses related to share based payment transactions
In EUR mn
the target achievements and the share price is
estimated (the latter on basis of market quotes). In
case of major changes in external factors the
Supervisory Board can adjust the target levels of the
performance criteria of the Annual Bonus. The
granted shares after deduction of taxes are trans-
ferred to a trustee deposit, managed by the
Company, to be held for three years.
In 2018 expenses amounting to EUR 2 mn were
recorded with a corresponding increase in equity
(2017: EUR 3 mn).
Total expense
In 2018 expenses related to share based payment
transactions were as follows:
Cash settled
Equity settled
Total expenses arising from share based payment transactions
2018
2017
6
6
12
44
12
56
199
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Other Information
33 Average number of employees
Average number of employees 1
OMV Group excluding Petrom group 2
OMV Petrom group
Total Group
2018
6,864
13,409
20,272
2017
7,206
14,210
21,416
1 Calculated as the average of the month’s end numbers of employees during the year
2 The decrease in the average number of employees compared to 2017 is mainly related to the divestments of OMV Petrol Ofisi and OMV (PAKISTAN)
Exploration Gesellschaft m.b.H. OMV Petrol Ofisi impacts the comparison of 2018 to 2017 headcount, as the company was deconsolidated per June
2017 and until then contributed to the average number of employees in 2017.
34 Expenses Group auditor
Expenses for services rendered by the Group
auditor (including the international network in terms
of section 271b UGB) comprise the following:
Expenses for services rendered by the Group auditor (including the international network)
In EUR mn
2018
2017
thereof
Ernst&Young
Wirtschafts-
prüfungsgesell-
schaft m.b.H
1.34
0.54
0.00
0.00
1.88
Group auditor
2.94
0.64
0.05
0.24
3.86
thereof
Ernst&Young
Wirtschafts-
prüfungsgesell-
schaft m.b.H
0.89
0.95
0.00
0.03
1.87
Group auditor
2.48
1.07
0.18
0.03
3.76
Audit of Group accounts and year-
end audit
Other assurance services
Tax advisory services
Other services
Total
35 Related parties
Under IAS 24, details of relationships with related
parties and related enterprises not included in
consolidation must be disclosed. Enterprises and
individuals are considered to be related if one party
is able to control or exercise significant influence
over the business of the other. Österreichische
Beteiligungs AG (ÖBAG; previously Österreichische
Bundes- und Industriebeteiligungen GmbH (ÖBIB)),
Vienna, holds an interest of 31.5% and Mubadala
Petroleum and Petrochemicals Holding Company
L.L.C., (MPPH) Abu Dhabi, holds an interest of
24.9% in OMV Aktiengesellschaft; both are related
parties under IAS 24.
In 2018, there were arm's-length supplies of goods
and services between the Group and equity-
accounted companies, except for gas purchases
from OJSC Severneftegazprom which are not based
on market prices but on cost plus defined margin.
200
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Transactions with equity-accounted investments – Sales and Receivables
In EUR mn
Borealis
GENOL Gesellschaft m.b.H. & Co KG
Enerco Enerji Sanayi Ve Ticaret A.Ş.
Erdöl-Lagergesellschaft m.b.H.
PEGAS CEGH Gas Exchange Services GmbH
Trans Austria Gasleitung GmbH
Total
2018
2017
Sales and
other income
Trade
receivables
Sales and
other income
Trade
receivables
1,432
208
4
41
1
11
1,696
55
16
1
—
0
1
72
1,126
164
3
38
1
29
1,360
101
20
1
0
0
1
123
Transactions with equity-accounted investments – Purchases and Payables
In EUR mn
2018
2017
Purchases and
services
received
Trade
payables
Purchases and
services
received
Trade
payables
Borealis
Deutsche Transalpine Oelleitung GmbH
Enerco Enerji Sanayi Ve Ticaret A.Ş.
EPS Ethylen-Pipeline-Süd GmbH & Co KG
Erdöl-Lagergesellschaft m.b.H.
GENOL Gesellschaft m.b.H. & Co KG
OJSC Severneftegazprom
Trans Austria Gasleitung GmbH
Total
48
30
157
2
62
2
161
22
482
7
3
8
—
30
0
18
1
67
Dividends received from equity-accounted investments
In EUR mn
Borealis AG
Enerco Enerji Sanayi Ve Ticaret A.Ş.
GENOL Gesellschaft m.b.H. & Co KG
OJSC SEVERNEFTEGAZPROM
Pearl Petroleum Company Limited
Trans Austria Gasleitung GmbH
Total Group
44
28
171
—
77
2
16
21
359
5
1
16
—
56
0
18
2
100
2018
2017
360
1
1
10
34
15
422
270
5
0
15
67
11
369
As of balance sheet date, other financial receivables
in an amount of EUR 6 mn (2017: EUR 6 mn) were
outstanding from Freya Bunde-Etzel GmbH & Co. KG.
As per December 31, 2018 there were other financial
liabilities in an amount of EUR 3 mn (2017:
EUR 4 mn) with Trans Austria Gasleitung GmbH.
The balance of prepayments received, shown in line
contract liabilities, from Erdöl-Lagergesellschaft
m.b.H. amounted to EUR 140 mn at December 31,
2018 (2017: EUR 153 mn) and is related to a long-
term contract for rendering of services.
Government-related entities
Based on the OMV ownership structure, the
Republic of Austria has an indirect relationship with
OMV via ÖBAG and is therefore, together with
companies in which the Republic of Austria is a
majority shareholder, considered a related party.
OMV has transactions at arm´s length in the normal
course of business mainly with Österreichische Post
AG, Verbund AG, Österreichische Bundesbahnen-
Holding Aktiengesellschaft, Bundesbeschaffung
GmbH and their subsidiaries.
Via MPPH, OMV has an indirect relationship with
the Emirate of Abu Dhabi, which is, together with
the companies under control of Abu Dhabi also
201
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
receivable balance towards ADNOC.Furthermore, in
2018 OMV acquired from ADNOC a 20% stake in the
offshore fields SARB and Umm Lulu, having CEPSA
a partner in the concession and also a 5% interest in
the Ghasha concession offshore Abu Dhabi (see
Note 3 for further details).
considered a related party. In 2018, there were
supplies of goods and services for instance with
Compañía Española de Petróleos (CEPSA) and Abu
Dhabi National Oil company (ADNOC). OMV
cooperates with ADNOC in several Upstream
arrangements, one of which is an evaluation
agreement over several undeveloped oil and gas
fields in North-West Offshore Abu Dhabi. This
agreement is resulting in an open long-term
Key management personnel compensation
Remuneration received by the Executive Board
In EUR mn
active members of the Executive
Board as of December 31, 2018
former members of the Executive
Board
Seele Pleininger Florey Leitner Davies 6 Floren 7 Huijskes 8 Roiss 9
Total
2018
Short term benefits
Fixed (base salary)
Variable (cash bonus) 1
Benefits in kind
Post employment benefits
Pension fund
contributions
Share based benefits 1
2.01
1.10
0.90
0.01
0.28
0.28
2.35
1.34
0.75
0.58
0.01
0.19
0.19
0.96
Variable (Equity Deferral
2017) 2
Variable (LTIP)
Total
0.80
1.55 3
4.64
0.51
0.45 4
2.49
1.35
0.70
0.60
0.05 5
0.18
0.18
0.53
0.53
—
2.06
1.41
0.70
0.70
0.01
0.18
0.18
2.34
0.62
1.72
3.93
0.15
—
0.15
—
—
—
2.59
0.13
2.45
2.74
—
—
—
—
—
—
1.48
—
1.48
1.48
—
—
—
—
—
—
1.78
—
1.78
1.78
—
—
—
—
—
6.26
3.25
2.92
0.09
0.81
—
3.30
0.81
15.32
—
3.30
3.30
2.59
12.73
22.40
1 The variable components relate to target achievement in 2017, for which bonuses were paid in 2018.
2 The Equity Deferral from the Annual Bonus was renamed from “Share part of the Annual Bonus” at the grant date.
3 Rainer Seele received pro-rated payout in shares for LTIP 2015 as he joined the Executive Board effectively July 1, 2015.
4 Johann Pleininger received pro-rated payout in shares and in addition cash payment amounting to EUR 0.52 mn based on the senior manager LTIP
2015.
5 Including schooling costs, moving costs and related taxes
6 David C. Davies resigned from the Executive Board effectively July 31, 2016.
7 Hans-Peter Floren resigned from the Executive Board effectively December 31, 2014.
8 Jaap Huijskes resigned from the Executive Board effectively August 31, 2015.
9 Gerhard Roiss resigned from the Executive Board effectively June 30, 2015.
202
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Remuneration received by the Executive Board
In EUR mn
active members of the Executive
Board as of December 31, 2017
former members of the Executive
Board
Seele Pleininger Florey Leitner Davies 3,4 Floren 5 Huijskes 6 Roiss 7
Total
2017
Short term benefits
Fixed (base salary)
Variable (cash bonus)
Benefits in kind
Post employment benefits
Pension fund
contributions
Share based benefits
Variable (Matching
Share Plan)
Variable (LTIP)
Total
1.65
0.90
0.74
0.01
0.23
0.23
0.85
0.85
—
2.73
1.04
0.90
0.57
0.45
0.01
0.14
0.60
0.25
0.06 2
0.15
1.29
0.70
0.57
0.01
0.18
0.82
0.22
0.60
0.00
0.05
—
—
—
—
—
0.15
—
0.15
—
—
—
—
—
—
—
5.85
3.00
2.76
0.10
0.75
0.14
0.52
0.15
0.28
0.18
0.73
0.05
0.81
—
0.08
—
0.27
—
0.18
0.75
3.73
0.52
— 1
1.70
0.28
—
1.34
0.66
0.07
2.19
0.69
0.12
1.68
—
0.08
0.08
0.17
0.10
0.42
3.18
—
0.54
0.18
0.18 10.32
1 Johann Pleininger was entitled to EUR 0.04 mn based on the senior manager LTIP 2014 (paid out in cash).
2 Including schooling costs and related taxes
3 David C. Davies resigned from the Executive Board effectively July 31, 2016.
4 David C. Davies received payments under his employment contract in force until March 31, 2017 as well as bonus and LTIP payments in April 2017.
5 Hans-Peter Floren resigned from the Executive Board effectively December 31, 2014.
6 Jaap Huijskes resigned from the Executive Board effectively August 31, 2015.
7 Gerhard Roiss resigned from the Executive Board effectively June 30, 2015.
Remuneration received by top executives (excl. Executive Board) 1
In EUR mn
Salaries and bonuses
Pension fund contribution
Severance benefits
Share-based benefits
Other long-term benefits
Total
1 In 2018 there were 41 top executives (2017: 44).
2018
23.2
1.8
0.8
21.7
0.0
47.4
2017
18.5
1.3
1.8
3.8
0.1
25.4
The members of the Executive Board and the
members of the Supervisory Board are covered by
directors and officers liability insurance (D&O) and
criminal legal expenses insurance. A large number
of other OMV employees also benefit from these
two forms of insurance, and the insurers levy lump-
sum premiums, which are not specifically attributed
to the Board members.
See Note 32 for details on Long Term Incentive Plans
and Equity Deferral.
In 2018, remuneration expenses for the Supervisory
Board amounted to EUR 0.6 mn (2017: EUR 0.7 mn).
203
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
36 Unconsolidated structured entities
OMV is selling trade receivables in a securitization
program to Carnuntum DAC, based in Dublin,
Ireland. In 2018, OMV transferred trade receivables
amounting in total to EUR 4,868 mn to Carnuntum
DAC (2017: EUR 4,275 mn).
As at December 31, 2018, OMV held seller participa-
tion and complementary notes in Carnuntum DAC
amounting to EUR 183 mn (2017: seller participation
notes of EUR 138 mn) shown in other financial
assets. As of December 31, 2018, the maximum
exposure to loss from the securitization transaction
was EUR 150 mn (2017: EUR 120 mn).
The seller participation notes are senior to a loss
reserve and a third party investor participation.
37 Subsequent events
On January 27, 2019 OMV signed agreements for
the purchase of a 15% share in ADNOC Refining.
The estimated purchase price for OMV amounts to
approximately USD 2.5 bn based on 2018 year-end
net debt. The final purchase price is dependent on
the net debt as of closing and certain working
capital adjustments.
On January 31, 2019, OMV has bought a 50% stake
of the issued share capital in Sapura OMV Up-
stream Sdn. Bhd. for an amount of USD 540 mn.
The complementary notes are senior to seller
participation notes and are of the same seniority as
the senior notes issued by the program. The risk
retained by OMV Group is insignificant and therefore
the trade receivables sold are derecognized in their
entirety. The receivables are sold at their nominal
amount less a discount. The discount was recognized
in profit or loss and amounted in total to EUR 30 mn
in 2018 (2017: EUR 25 mn). Interest income on the
notes held in Carnuntum DAC amounted to
EUR 4 mn in 2018 (2017: EUR 3 mn). In addition,
OMV received a service fee for the debtor manage-
ment services provided for the receivables sold.
In addition, the parties agreed to an additional
consideration of up to USD 85 mn based on
certain conditions, mainly linked to the resource
volume in Block 30, Mexico, at the time the final
investment decision is taken. Both parties have
also agreed to refinance the existing intercompany
debt of USD 350 mn. For further details please
refer to Note 3.
204
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
38 Direct and indirect investments of OMV Aktiengesellschaft
Changes in consolidated group
Name of company
Registered Office
Type of Change 1
Effective date
Upstream
Wellington
OMV GSB LIMITED
Vienna
OMV Abu Dhabi Production GmbH
Wellington
Energy Infrastructure Limited
Energy Petroleum Holdings Limited
Wellington
Energy Petroleum Investments Limited Wellington
Wellington
Energy Petroleum Taranaki Limited
OMV New Zealand Production Limited Wellington
Wellington
OMV New Zealand Services Limited
OMV Taranaki Limited
Wellington
Taranaki Offshore Petroleum Company Wellington
OMV Maurice Energy Limited
Port Louis
OMV (PAKISTAN) Exploration
Gesellschaft m.b.H.
OMV (Gnondo) Exploration S.A.
OMV (Manga) Exploration S.A.
OMV (Mbeli) Exploration S.A.
OMV (Ntsina) Exploration S.A.
OMV (Gnondo) Exploration GmbH in
Liqu.
OMV (Manga) Exploration GmbH in
Liqu.
OMV (Mbeli) Exploration GmbH in
Liqu.
OMV (Ntsina) Exploration GmbH in
Liqu.
OMV Tunisia Upstream GmbH
Vienna
Libreville
Libreville
Libreville
Libreville
Vienna
Vienna
Vienna
Vienna
Vienna
First consolidation (A)
First consolidation
First consolidation (A)
First consolidation (A)
First consolidation (A)
First consolidation (A)
First consolidation (A)
First consolidation (A)
First consolidation (A)
First consolidation (A)
Deconsolidation
Deconsolidation
Deconsolidation (L)
Deconsolidation (L)
Deconsolidation (L)
Deconsolidation (L)
March 16, 2018
April 29, 2018
December 28, 2018
December 28, 2018
December 28, 2018
December 28, 2018
December 28, 2018
December 28, 2018
December 28, 2018
December 28, 2018
June 28, 2018
June 28, 2018
September 10, 2018
September 10, 2018
September 10, 2018
September 10, 2018
Deconsolidation (L)
December 20, 2018
Deconsolidation (L)
December 20, 2018
Deconsolidation (L)
December 20, 2018
Deconsolidation (L)
Deconsolidation
December 20, 2018
December 21, 2018
Downstream Oil
DUNATÀR Köolajtermék Tároló és
Kereskedelmi Kft.
PETRODYNE-CSEPEL Zrt.
Abu Dhabi Petroleum Investments LLC
Pak-Arab Refinery Limited
Budapest
Budapest
Abu Dhabi
Karachi
First consolidation 2
First consolidation (A) 2
First consolidation (Q) 3
First consolidation (Q) 3
October 1, 2018
October 1, 2018
December 31, 2018
December 31, 2018
Downstream Gas
OMV Gas, Marketing & Trading
Belgium BVBA
OMV Samsun Elektrik Üretim Sanayi
ve Ticaret A.Ş.
Brussels
First consolidation
December 26, 2018
Istanbul
Deconsolidation
September 6, 2018
1 “First consolidation” refers to newly formed or existing subsidiaries, while “First consolidation (A)” indicates the acquisition of a company. “First
consolidation (Q)” the change of consolidation method to at-equity consolidation of a company that was not consolidated before.
Companies marked with “Deconsolidation” have been sold while all companies marked with “Deconsolidation (L)” were deconsolidated following a
liquidation process.
2 OMV Group previously held DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft as other not consolidated investment (OMV share 48.28%). Through
acquisition of 100% shares on PETRODYNE-CSEPEL Zrt, which held the remaining shares in the company, both entities were included in the
consolidation (see Note 3 for further details).
3 For additional details on PakArab Refinery Limited and Abu Dhabi Petroleum Investments LLC see Note 3.
205
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
For further information on acquisitions and
disposals refer to Note 3 Changes in group
structure.
Number of consolidated companies
At the beginning of the year
Included for the first time
Merged
Deconsolidated during the year
At the end of the year
thereof domiciled and operating abroad
thereof domiciled in Austria and operating
abroad
2018
2017
Full
consoli-
dation
Equity
consoli-
dation
Full
consoli-
dation
Share of
assets and
liabilities
Equity
consoli-
dation
98
13
—
(12)
99
53
22
15
2
—
—
17
9
—
101
6
(2)
(7)
98
47
26
1
—
—
(1)
—
—
—
12
3
—
—
15
7
—
206
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
List of investments
List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft
with an interest of at least 20%
Upstream
Energy Infrastructure Limited, Wellington
Energy Petroleum Holdings Limited, Wellington (EPHNZ)
Energy Petroleum Investments Limited, Wellington (EPILNZ)
Energy Petroleum Taranaki Limited, Wellington (EPTLNZ)
ENERGY PRODUCTION ENHANCEMENT SRL, Bucharest
JSC GAZPROM YRGM Development, Salekhard 2
KOM MUNAI LLP, Aktau 3
Maui Development Limited, Wellington
OJSC SEVERNEFTEGAZPROM, Krasnoselkup
OMV Abu Dhabi E&P GmbH, Vienna
OMV Abu Dhabi Offshore GmbH, Vienna
OMV Abu Dhabi Production GmbH, Vienna 4
OMV (AFRICA) Exploration & Production GmbH in Liqu.,
Vienna (OAFR) 5
OMV AUSTRALIA PTY LTD, Perth (OAUST)
OMV Austria Exploration & Production GmbH, Vienna
(OEPA)
OMV Barrow Pty Ltd, Perth
OMV Beagle Pty Ltd, Perth
OMV (Berenty) Exploration GmbH, Vienna
OMV Bina Bawi GmbH, Vienna
OMV Block 70 Upstream GmbH, Vienna
OMV East Abu Dhabi Exploration GmbH, Vienna
OMV (EGYPT) Exploration GmbH in Liqu., Vienna 5, 6
OMV Exploration & Production GmbH, Vienna (OMVEP)
OMV EXPLORATION & PRODUCTION LIMITED, Douglas
OMV (FAROE ISLANDS) Exploration GmbH, Vienna
OMV (Gnondo) Exploration GmbH in Liqu., Vienna
OMV (Gnondo) Exploration S.A., Libreville
OMV GSB LIMITED, Wellington
OMV (IRAN) onshore Exploration GmbH, Vienna
OMV Jardan Block 3 Upstream GmbH, Vienna
OMV (Mandabe) Exploration GmbH, Vienna
OMV (Manga) Exploration GmbH in Liqu., Vienna
OMV (Manga) Exploration S.A., Libreville
OMV Maurice Energy GmbH, Vienna (MAURI)
OMV Maurice Energy Limited, Port Louis
OMV (Mbeli) Exploration GmbH in Liqu., Vienna
OMV (Mbeli) Exploration S.A., Libreville
OMV Middle East & Africa GmbH, Vienna
OMV Myrre Block 86 Upstream GmbH, Vienna
Parent
company
NZEA
OPLNZ
OSLNZ
OPLNZ
PETROM
ROMAN
OMVEP
PETROM
EPTLNZ
EPILNZ
EPHNZ
NZEA
TOPNZ
OMVEP
OMVEP
OMVEP
OMVEP
OWEAFR
OMV AG
OMVEP
OAUST
OAUST
OMVEP
PETEX
OMVEP
OMVEP
OMVEP
OMV AG
OMVEP
OMVEP
OAFR
OWEAFR
NZEA
OMVEP
OMVEP
OMVEP
OAFR
OWEAFR
OMVEP
MAURI
OAFR
OWEAFR
OMVEP
OMVEP
Equity
interest
in % as of
December
31, 2018
Equity
interest
in % as of
December
31, 2017
Type of
consoli-
dation 1
C
C
C
C
NC
C
C
NC
AE
C
C
C
C
C
C
NC
NC
C
C
C
C
NC
C
NC
NC
C
C
C
C
C
C
C
100.00
100.00
100.00
100.00
99.99
0.01
0.00
100.00
38.75
20.00
18.75
16.25
6.25
24.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
0.01
0.00
95.00
24.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
207
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft
with an interest of at least 20%
OMV (Namibia) Exploration GmbH, Vienna
OMV New Zealand Limited, Wellington (NZEA)
OMV New Zealand Production Limited, Wellington (OPLNZ)
OMV New Zealand Services Limited, Wellington (OSLNZ)
OMV (NORGE) AS, Stavanger
OMV (Ntsina) Exploration GmbH in Liqu., Vienna
OMV (Ntsina) Exploration S.A., Libreville
OMV OF LIBYA LIMITED, Douglas
OMV Offshore (Namibia) GmbH, Vienna (ONAFRU)
OMV Offshore Bulgaria GmbH, Vienna
OMV Offshore Morondava GmbH, Vienna
OMV Oil and Gas Exploration GmbH, Vienna
OMV Oil Exploration GmbH, Vienna
OMV Oil Production GmbH, Vienna
OMV Orient Hydrocarbon GmbH, Vienna
OMV Orient Upstream GmbH, Vienna
OMV Oystercatcher Exploration GmbH, Vienna
OMV (PAKISTAN) Exploration Gesellschaft m.b.H., Vienna
OMV Petroleum Exploration GmbH, Vienna (PETEX)
OMV Petroleum Pty Ltd, Perth
OMV Proterra GmbH, Vienna
OMV Russia Upstream GmbH, Vienna
OMV Taranaki Limited, Wellington
OMV (Tunesien) Production GmbH, Vienna (OTNPRO)
OMV (TUNESIEN) Sidi Mansour GmbH, Vienna
OMV Tunisia Upstream GmbH, Vienna
OMV Upstream International GmbH, Vienna (OUPI)
OMV (West Africa) Exploration & Production GmbH, Vienna
(OWEAFR)
OMV (YEMEN) Al Mabar Exploration GmbH, Vienna
OMV (Yemen Block S 2) Exploration GmbH, Vienna
OMV (YEMEN) South Sanau Exploration GmbH, Vienna
Pearl Petroleum Company Limited, Road Town
PEI Venezuela Gesellschaft mit beschränkter Haftung,
Burghausen
Petroleum Infrastructure Limited, Wellington
PETROM EXPLORATION & PRODUCTION LIMITED, Douglas
Preussag Energie International GmbH, Burghausen
Taranaki Offshore Petroleum Company, Wellington (TOPNZ)
TASBULAT OIL CORPORATION LLP, Aktau
Thyna Petroleum Services S.A., Sfax
Parent
company
ONAFRU
OMVEP
NZEA
NZEA
OMVEP
OAFR
OWEAFR
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
NZEA
OEPA
OMVEP
NZEA
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OMVEP
OUPI
OMVEP
NZEA
PETROM
OMVEP
OPLNZ
PETROM
OTNPRO
Equity
interest
in % as of
December
31, 2018
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Type of
consoli-
dation 1
C
C
C
C
C
C
C
C
C
C
C
C
NC
NC
NC
C
NC
NC
C
C
C
NC
C
100.00
C
C
C
NC
AE
NC
C
C
C
C
C
NAE
100.00
100.00
100.00
100.00
10.00
100.00
100.00
99.99
100.00
100.00
100.00
50.00
Equity
interest
in % as of
December
31, 2017
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
10.00
100.00
100.00
99.99
100.00
100.00
50.00
208
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft
with an interest of at least 20%
Downstream Oil
Abu Dhabi Petroleum Investments LLC, Abu Dhabi (ADPI) 4
Aircraft Refuelling Company GmbH, Vienna
Autobahn – Betriebe Gesellschaft m.b.H., Vienna
Avanti Deutschland GmbH, Berchtesgaden 6
Avanti GmbH, Anif (FETRAT) 6
Borealis AG, Vienna
BRAZI OIL & ANGHELESCU PROD COM SRL, Brazi 5
BSP Bratislava-Schwechat Pipeline GmbH, Vienna
BTF Industriepark Schwechat GmbH, Vienna
Deutsche Transalpine Oelleitung GmbH, Munich
DUNATÀR Köolajtermék Tároló és Kereskedelmi Kft.,
Budapest 3, 4, 7
E-Mobility Provider Austria GmbH, Vienna
EPS Ethylen-Pipeline-Süd GmbH & Co KG, Munich
Erdöl-Lagergesellschaft m.b.H., Lannach
FE-Trading trgovina d.o.o., Ljubljana
GENOL Gesellschaft m.b.H., Vienna
GENOL Gesellschaft m.b.H. & Co, Vienna
Haramidere Depoculuk Anonim Şirketi, Istanbul
KSW Beteiligungsgesellschaft m.b.H., Feldkirch (SWJS)
KSW Elektro- und Industrieanlagenbau Gesellschaft m.b.H.,
Feldkirch
OMV Adriatic Marketing d.o.o., Zagreb
OMV BULGARIA OOD, Sofia
OMV Česká republika, s.r.o., Prague
OMV Deutschland GmbH, Burghausen (OMVD)
OMV Hungária Ásványolaj Korlátolt Felelösségü Társaság,
Budapest (OHUN)
OMV – International Services Ges.m.b.H., Vienna
OMV PETROM Aviation S.A., Otopeni
OMV PETROM MARKETING SRL, Bucharest (ROMAN)
OMV Refining & Marketing GmbH, Vienna (OMVRM)
OMV Refining & Marketing Middle East & Asia GmbH,
Vienna
OMV SLOVENIJA trgovina z nafto in naftnimi derivati,
d.o.o., Koper
OMV Slovensko s.r.o., Bratislava
Parent
company
OMVRM
OMVRM
OMVRM
FETRAT
OMVRM
OMVRM
OMV AG
PETROM
OMVRM
OMVRM
OMVD
OHUN
PDYNHU
OMVRM
OMVD
OMVRM
FETRAT
OMVRM
OMVRM
OMVRM
GASTR
OMVRM
SWJS
OMVRM
PETROM
OMVRM
OMVRM
OMVRM
OMV AG
OMVRM
OMVRM
PETROM
ROMAN
PETROM
OMV AG
OMVRM
OMVRM
OMVRM
Equity
interest
in % as of
December
31, 2018
Equity
interest
in % as of
December
31, 2017
Type of
consoli-
dation 1
AE2
NAE
NAE
C
C
AE
NAE
NAE
NAE
AE
C
AE2
AE
AE1
C
NAE
AE
C
NC
NAE
NC
C
C
C
C
C
C
C
C
C
C
C
25.00
33.33
47.19
100.00
100.00
32.67
3.33
37.70
26.00
50.00
25.00
48.28
51.72
40.00
20.66
55.60
100.00
29.00
29.00
51.00
49.00
100.00
25.10
100.00
99.90
0.10
100.00
90.00
10.00
100.00
100.00
99.99
0.01
100.00
100.00
25.00
33.33
47.19
100.00
100.00
32.67
3.33
37.70
26.00
50.00
25.00
48.28
40.00
20.66
55.60
100.00
29.00
29.00
51.00
49.00
100.00
25.10
100.00
99.90
0.10
100.00
90.00
10.00
100.00
100.00
99.99
0.01
100.00
100.00
100.00
100.00
92.25
99.96
92.25
99.96
209
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft
with an interest of at least 20%
Equity
interest
in % as of
December
31, 2018
Equity
interest
in % as of
December
31, 2017
99.96
0.04
100.00
100.00
100.00
100.00
40.00
100.00
100.00
20.00
33.33
40.00
25.00
50.00
33.33
80.00
99.96
0.04
100.00
100.00
100.00
100.00
20.00
33.33
40.00
25.00
50.00
33.33
80.00
Type of
consoli-
dation 1
C
C
NC
C
NC
AE2
C
C
NAE
NAE
AE2
AE
NAE
NAE
NC
Parent
company
PETROM
OMVRM
OMVRM
OMVRM
OMVRM
OTRAD
ADPI
OHUN
PETROM
OMVRM
OMVRM
OMVRM
OMVRM
OHUN
OMVD
PETROM
OMVRM
AE
25.00
25.00
OGG
OGG
OGI
OGI
OGSG
OGI
OGI
ECOGAS
ECONDE
OMV AG
ECOGAS
ECOGAS
OGI
ECOGAS
ECOGAS
OFS
OGI
OGI
OGI
OGI
PETROM
OGI
OGI
NAE
C
C
AE
AE
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
23.13
51.00
65.00
40.00
39.99
51.00
100.00
99.9
0.01
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
23.13
51.00
65.00
40.00
39.99
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
100.00
OMV SRBIJA d.o.o., Belgrade
OMV Supply & Trading AG, Zug
OMV Supply & Trading Italia S.r.l., Trieste
OMV Supply & Trading Limited, London (OTRAD)
OMV Supply & Trading Singapore PTE LTD., Singapore 7
Pak-Arab Refinery Limited, Karachi
PETRODYNE-CSEPEL Zrt., Budapest (PDYNHU)
Petrom-Moldova S.R.L., Chisinau
Routex B.V., Amsterdam
Salzburg Fuelling GmbH, Salzburg
SMATRICS GmbH & Co KG, Vienna
Società Italiana per l’Oleodotto Transalpino S.p.A., Trieste
SuperShop Marketing GmbH, Budapest
TGN Tankdienst-Gesellschaft Nürnberg GbR, Nuremberg
TRANS GAS LPG SERVICES SRL, Bucharest
Transalpine Ölleitung in Österreich Gesellschaft m.b.H.,
Matrei in Osttirol
Downstream Gas
AGCS Gas Clearing and Settlement AG, Vienna
AGGM Austrian Gas Grid Management AG, Vienna
Central European Gas Hub AG, Vienna (HUB)
Enerco Enerji Sanayi Ve Ticaret A.Ş., Istanbul
Freya Bunde-Etzel GmbH & Co. KG, Bonn
GAS CONNECT AUSTRIA GmbH, Vienna (OGG)
OMV Enerji Ticaret Anonim Şirketi, Istanbul (GASTR)
OMV Gas, Marketing & Trading Belgium BVBA, Brussels
OMV Gas & Power GmbH, Vienna (OGI)
OMV Gas Marketing & Trading d.o.o., Zagreb
OMV Gas Marketing & Trading Deutschland GmbH,
Regensburg (ECONDE)
OMV Gas Marketing & Trading GmbH, Vienna (ECOGAS)
OMV Gas Marketing & Trading Hungária Kft., Budapest
OMV Gas Marketing & Trading Italia S.r.l., Milan
OMV Gas Marketing Trading & Finance B.V., Amsterdam
OMV Gas Storage Germany GmbH, Cologne (OGSG)
OMV Gas Storage GmbH, Vienna
OMV Gaz Iletim A.S., Istanbul
OMV Kraftwerk Haiming GmbH, Haiming
OMV PETROM GAS SRL, Bucharest
OMV Samsun Elektrik Üretim Sanayi ve Ticaret A.Ş.,
Istanbul
OMV Switzerland Holding AG, Zug
210
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
List of subsidiaries, equity-accounted investments and other investments of OMV Aktiengesellschaft with an interest of
at least 20%
Equity
interest
in % as of
December
31, 2018
Equity
interest
in % as of
December
31, 2017
49.00
50.00
15.53
20.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.00
25.00
100.00
99.99
49.00
50.00
15.53
100.00
20.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.00
25.00
100.00
99.99
51.01
51.01
Type of
consoli-
dation 1
AE
NAE
AE2
NAE
C
C
C
C
C
NC
C
C
C
C
C
Parent
company
HUB
OGI
OGG
OMV AG
PETROM
OMV AG
SNO
SNO
SNO
SNO
OMV AG
OMV AG
SNO
PETROM
OMV AG
PETROM
OMV AG
PEGAS CEGH Gas Exchange Services GmbH, Vienna
South Stream Austria GmbH, Vienna
Trans Austria Gasleitung GmbH, Vienna 8
Corporate and Other
Amical Insurance Limited, Douglas
ASOCIATIA ROMANA PENTRU RELATIA CU INVESTITORII,
Bucharest
Diramic Insurance Limited, Gibraltar
OMV Clearing und Treasury GmbH, Vienna
OMV Finance Services GmbH, Vienna (OFS)
OMV Finance Services NOK GmbH, Vienna
OMV Finance Solutions USD GmbH, Vienna
OMV Insurance Broker GmbH, Vienna
OMV International Oil & Gas GmbH, Baar 9
OMV Petrom Global Solutions SRL, Bucharest
OMV Solutions GmbH, Vienna (SNO)
PETROMED SOLUTIONS SRL, Bucharest
Petrom
OMV PETROM SA, Bucharest (PETROM) 10
1 Type of consolidation:
C
Consolidated subsidiary
AE Associated companies accounted for at-equity
AE1 Despite majority interest not consolidated due to absence of control
AE2 Joint venture accounted at-equity
NC Not-consolidated subsidiary; shell or distribution companies of relative insignificance individually and collectively to the
consolidated financial statements
NAE Other not consolidated investment; associated companies of relatively little importance to the assets and earnings of the
consolidated financial statements
2 Economic share 99.99%
3 Equity interest changed compared to 2017.
4 Type of consolidation was changed compared to 2017.
5 In liquidation
6 Company name changed compared to 2017.
7 Parent company was changed compared to 2017.
8 Economic share 10.78%
9 Registered office changed compared to 2017.
10 OMV Petrom SA is assigned to the relevant segments in the segment reporting.
All the subsidiaries which are not consolidated
either have low business volumes or are distribu-
tion companies; the total sales, net income/losses
and equity of such companies represent less than
1% of the Group totals.
211
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Material joint operations (IFRS 11)
Name
Nature of activities
Operating
segment
Principal
place of
business
%
ownership
2018
%
ownership
2017
Nafoora – Augila 1
Concession 103 1
Latif 2
Mehar 2, 3
Pohokura 4
Neptun Deep
Nawara
Block S(2)
Upstream
Onshore development of
hydrocarbon reservoirs
Onshore development and
production of hydrocarbons Upstream
Onshore development and
production of hydrocarbons Upstream
Onshore development and
production of hydrocarbons Upstream
Offshore production of
hydrocarbons
Offshore exploration for
hydrocarbons
Onshore development of
hydrocarbons reservoirs
Onshore development and
production of hydrocarbons Upstream
Upstream
Upstream
Upstream
Libya
Libya
Pakistan
Pakistan
New Zealand
Romania
Tunisia
Yemen
100
100
—
—
74
50
50
44
100
100
33
59
50
50
44
1 The percentage disclosed represents the Second Party Share. The state owned Libyan national oil corporation NOC is entitled to of 88% to 90% of the
production (“primary split”).
2 Part of the Pakistan disposal group divested as of June 28, 2018
3 OMV had no control over the Mehar joint operation as the minimum percentage for relevant decision taking was 76%.
4 OMV increased its share in Pohokura as of December 28, 2018 which lead to the classification as material joint operation according to IFRS11
(previously other significant arrangement).
212
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Other significant arrangements
Name
Nature of activities
NC 115 1
NC 186 1
Maari 2
Pohokura 3
Aasta Hansteen
Edvard Grieg
Gudrun
Gullfaks
Wisting
Sarb & Umm Lulu
Onshore development and
production of hydrocarbons
Onshore development and
production of hydrocarbons
Offshore production of
hydrocarbons
Offshore production of
hydrocarbons
Offshore development and
production of hydrocarbons
Offshore production of
hydrocarbons
Offshore production of
hydrocarbons
Offshore production of
hydrocarbons
Offshore exploration for
hydrocarbons
Offshore development and
production of hydrocarbons
Operating
segment
Upstream
Upstream
Upstream
Upstream
Upstream
Upstream
Upstream
Upstream
Upstream
Upstream
Ghasha
Offshore exploration
Upstream
Principal
place of
business
%
ownership
2018
%
ownership
2017
Libya
Libya
New
Zealand
New
Zealand
Norway
Norway
Norway
Norway
Norway
Abu
Dhabi
Abu
Dhabi
30
24
69
15
20
24
19
25
20
5
1 The percentage disclosed represents the Second Party Share. The state owned Libyan national oil corporation is entitled to 88% to 90% of the
production (“primary split”).
2 OMV does not have control nor joint control over the Maari fields as there is more than one combination of parties which ensures the necessary
majority (75%) for relevant decisions.
3 OMV increased its share in Pohokura as of December 28, 2018 which lead to the classification as material joint operation according to IFRS11.
30
24
69
26
15
20
24
19
25
—
—
213
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Oil and Gas Reserve Estimation and Disclosures
(unaudited)
The following tables provide supplementary information in respect of the Group’s oil and gas activities. In
the absence of detailed disclosure rules in this area under IFRS, the Group has elected to voluntarily
disclose the data that would have been required under the ASC 932 as if it was reporting under US GAAP.
To the extent that information refers to financial statements data, the information is based on the primary
financial statements (IFRS financial statements).
The regional structure is presented below:
Romania and Black Sea Kazakhstan and Romania
Austria
Austria
North Sea
Norway and United Kingdom (until 2017)
Asia-Pacific
Australia and New Zealand
Russia
Russia
Middle East and Africa
Bulgaria, Iran (evaluation on hold), Kurdistan Region of Iraq, Libya, Madagascar,
Pakistan, Tunisia, United Arab Emirates, Yemen, Algeria (until 2016), Gabon (until
2016) and Namibia (until 2016)
Acquisitions
On April 29, 2018, OMV signed an agreement for the
award of a 20% stake in the offshore concessions
SARB and Umm Lulu in Abu Dhabi, as well as the
associated infrastructure.
interest in JSC Gazprom YRGM Development (fully
consolidated).
Disposals
On June 28, 2018, the sale of the Upstream compa-
nies active in Pakistan was closed.
On December 19, 2018 a concession agreement was
signed awarding OMV with a 5% interest in the
Ghasha concession offshore Abu Dhabi comprising
the Ghasha mega project.
On December 21, 2018, the sale of OMV Tunisia
Upstream GmbH was finalized, comprising part of
OMV’s Upstream business in Tunisia.
On December 28, 2018, OMV completed the
acquisition of Shell’s Upstream business in New
Zealand comprising interests in Pohokura (48%) and
Maui (83.75%) as well as related infrastructure for
production, storage and transportation.
Furthermore, on December 28, 2018, OMV acquired
from Todd Petroleum Mining Company Limited their
6.25% share in Maui. As a result of the transaction,
OMV obtained 100% interest in Maui field and
assumed control.
See Note 3 for further details on acquisitions in the
year 2018.
In 2017, OMV acquired a 24.99% interest in Yuzhno
Russkoye gas field in Russia. The transaction was
closed on November 30, 2017 and comprised the
24.99% interest in OJSC Severneftegazprom (at-
equity consolidated) and the 99.99% economic
See Note 3 for further details on divestments in the
year 2018.
The subsidiary in the United Kingdom was divested
on January 13, 2017.
Non-controlling interest
As OMV holds 51% of OMV Petrom, it is fully
consolidated; figures therefore include 100% of
OMV Petrom assets and results. OMV Petrom holds
100% in Kazakhstan subsidiaries, therefore figures
include 100% of KOM MUNAI LLP and TASBULAT
OIL CORPORATION LLP assets and results.
Equity-accounted investments
OMV holds a 10% interest in Pearl Petroleum
Company Limited (Middle East and Africa region).
OMV has a 24.99% interest in OJSC Severneftegaz-
prom (Russia region).
214
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
The disclosures of equity-accounted investments in
below tables represent the interest of OMV in the
companies.
The subsequent tables may contain rounding
differences.
a) Capitalized costs
Capitalized costs represent the sum of capitalized oil
and gas assets, including other intangible assets
and property, plant and equipment such as land,
plant and machinery, concessions, licenses and
rights.
Capitalized costs – subsidiaries
In EUR mn
Unproved oil and gas properties
Proved oil and gas properties
Total
Accumulated depreciation
Net capitalized costs
Capitalized costs – equity-accounted investments
In EUR mn
Unproved oil and gas properties
Proved oil and gas properties
Total
Accumulated depreciation
Net capitalized costs
2018
2017
2016
2,587
24,510
27,097
(13,961)
13,136
2,116
22,372
24,489
(13,487)
11,002
2,392
23,561
25,952
(14,266)
11,686
2018
2017
2016
249
202
451
(35)
417
262
157
420
(22)
397
237
119
356
(16)
340
215
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
b) Costs incurred
Costs incurred include all costs, capitalized or
expensed, during the year in the Group’s oil and gas
property acquisition, exploration and development
activities.
Costs incurred
In EUR mn
Subsidiaries
Acquisition of proved
properties
Acquisition of unproved
properties
Exploration costs
Development costs
Costs incurred
Equity-accounted invest-
ments
Subsidiaries
Acquisition of proved
properties
Acquisition of unproved
properties
Exploration costs
Development costs
Costs incurred
Equity-accounted invest-
ments
Subsidiaries
Acquisition of proved
properties
Acquisition of unproved
properties
Exploration costs 1
Development costs
Costs incurred
Equity-accounted invest-
ments
Romania
and Black
Sea
Austria North Sea
Middle
East and
Africa
Russia
Total
Asia-
Pacific
2018
—
—
102
412
514
—
—
—
53
327
380
—
—
—
77
291
368
—
—
—
61
59
120
—
—
—
16
53
68
—
—
—
5
31
36
—
—
788
0
99
210
309
—
2
—
55
265
322
—
1
1
106
531
638
—
386
9
10
1,193
—
2017
—
—
14
4
18
—
2016
—
—
18
3
21
—
—
—
—
—
—
9
1,014
1,801
321
28
196
1,558
707
300
887
3,695
12
21
521
—
523
584
—
—
1,106
—
92
108
199
584
230
756
2,093
117
5
122
—
—
—
—
—
—
302
—
103
186
591
—
304
1
307
1,042
1,653
—
1 In Norway, exploration represents the costs less a 78% refund of the deductible costs.
c) Results of operations of oil and gas producing
activities
The following table represents only those revenues
and expenses which occur directly in connection
with OMV´s oil and gas producing operations. The
results of oil and gas activities should not be
equated to Upstream net income since interest
costs, general corporate overhead costs and other
costs are not allocated. Income taxes are hypotheti-
cally calculated, based on the statutory tax rates
and the effect of tax credits on investments and loss
carryforwards.
216
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Results of operations of oil and gas producing activities
In EUR mn
Romania and
Black Sea
Austria North Sea
Middle
East and
Africa
Russia
Asia-
Pacific
2018
Subsidiaries
Sales to unaffiliated
parties 1
Intercompany sales
Production costs
Royalties
Exploration expenses
Depreciation,
amortization and
impairment losses
Other costs 2
Results before income
taxes
Income taxes 3
Results from oil and
gas production
Net income of equity-
accounted investments
Subsidiaries
Sales to unaffiliated
parties 1
Intercompany sales
Production costs
Royalties
Exploration expenses
Depreciation,
amortization and
impairment losses
Other costs 2
Results before income
taxes
Income taxes 3
Results from oil and
gas production
Net income of equity-
accounted investments
105
1,981
2,086
(509)
(267)
(39)
(513)
(51)
(1,379)
707
(127)
(194)
418
224
(86)
(79)
(33)
(114)
(21)
(333)
(109)
26
1,051
394
1,445
(156)
—
(50)
(422)
(102)
(729)
716
(540)
580
(83)
176
—
—
—
95
1,698
1,792
(550)
(203)
(69)
(529)
(52)
(1,404)
388
(65)
323
—
(50)
382
333
(89)
(70)
(17)
(120)
(10)
(306)
27
(7)
19
—
810
316
1,126
(191)
—
(52)
(485)
(39)
(767)
359
(276)
83
—
84
132
216
(50)
(25)
(8)
(64)
(10)
(157)
59
(21)
37
—
2017
116
137
253
(45)
(33)
(14)
(79)
(9)
(180)
72
(17)
55
—
605
—
605
0
—
—
(90)
(406)
(496)
109
(21)
89
14
56
—
56
0
—
—
(10)
(41)
(51)
5
(1)
4
(1)
Total
2,172
3,351
5,523
(872)
(392)
(175)
(1,331)
(598)
(3,368)
2,155
(1,152)
520
427
947
(72)
(21)
(44)
(129)
(7)
(274)
673
(470)
203
1,003
26
40
301
258
559
(62)
(5)
(69)
(107)
(26)
(269)
289
(273)
16
108
1,329
2,791
4,118
(937)
(311)
(222)
(1,330)
(177)
(2,978)
1,141
(640)
501
107
217
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Results of operations of oil and gas producing activities
In EUR mn
Romania and
Black Sea
Austria North Sea
Asia-
Pacific
2016
Middle
East and
Africa
Russia
Subsidiaries
Sales to unaffiliated
parties 1
Intercompany sales
Result from asset sales
Production costs
Royalties
Exploration expenses
Depreciation, amortization
and impairment losses
Other costs 2
Results before income
taxes
Income taxes 3
Results from oil and gas
production
Net income of equity-
accounted investments
93
1,533
2
1,628
(506)
(201)
(60)
(563)
(160)
(1,490)
138
(20)
13
292
(1)
304
(85)
(56)
(6)
(132)
(13)
(293)
673
204
(20)
857
(236)
—
(660)
(1,095)
(20)
(2,010)
11
(1)
(1,153)
(5)
118
10
(1,158)
—
—
—
145
82
15
243
(48)
(27)
(19)
(71)
(10)
(174)
69
(11)
58
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
1,013
2,201
(2)
3,211
(938)
(290)
(808)
88
89
1
179
(63)
(6)
(63)
(186)
(28)
(347)
(2,047)
(230)
(4,314)
(168)
(1,103)
(10)
(47)
(179)
(1,150)
14
14
1 Includes hedging effects; Austria Region includes hedging effects of centrally managed derivatives (2018: EUR (219 mn), 2017: EUR (72) mn, 2016:
EUR (9) mn)
2 Includes inventory changes
3 Income taxes in North Sea and Middle East and Africa include corporation tax and special petroleum tax.
d) Oil and gas reserve quantities
Proved reserves are those quantities of oil and gas,
which, by analysis of geoscience and engineering
data, can be estimated with reasonable certainty to
be economically producible from a given date
forward, from known reservoirs, and under existing
economic conditions, operating methods, and
government regulation before the time at which
contracts providing the right to operate expire,
unless evidence indicates that renewal is reasonably
certain.
Proved developed reserves are those proved
reserves that can be expected to be recovered
through existing wells with existing equipment and
operating methods, or in which the costs of the
required equipment are relatively minor compared
with the cost of a new well and through installed
extraction equipment and infrastructure operational
at the time of the reserves estimate. It should be
reasonably certain that the required future expendi-
ture will be made to safeguard existing equipment
within the current budget.
Proved undeveloped reserves are those proved
reserves that are expected to be recovered from
new wells on undrilled acreage, or from existing
wells where a relatively major expenditure is
required for recompletion or substantial new
investment is required in order to safeguard or
replace ageing facilities.
218
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Crude oil and NGL
In mn bbl
Romania
and Black
Sea
Austria North Sea
Asia-
Pacific
Russia
Middle
East and
Africa
Total
Proved developed and undeveloped reserves – Subsidiaries
as of January 1, 2016
361.2
43.0
82.1
10.0
Revisions of previous
estimates
Purchases
Disposal
Extensions and discoveries
Production
as of December 31, 2016
Revisions of previous
estimates
Disposal
Extensions and discoveries
Production
as of December 31, 2017
Revisions of previous
estimates
Purchases
Disposal
Extensions and discoveries
Production
as of December 31, 2018
19.3
—
—
0.2
(29.1)
351.5
19.5
(2.3)
—
(27.3)
341.4
9.5
—
—
0.3
(26.8)
324.4
3.3
—
—
—
(5.1)
41.2
1.4
—
—
(4.6)
38.0
3.3
—
—
—
(4.3)
37.0
14.4
—
(0.5)
—
(17.3)
78.7
15.1
(27.5)
—
(18.7)
47.6
15.8
—
—
2.2
(17.1)
48.4
1.9
—
—
—
(3.3)
8.5
(0.6)
—
—
(2.9)
5.0
1.0
6.3
—
—
(2.1)
10.2
Proved developed and undeveloped reserves – Equity-accounted investments
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
—
—
—
—
—
—
—
—
—
Proved developed reserves – Subsidiaries
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
322.5
309.5
295.9
39.2
36.5
35.5
43.5
38.9
42.6
Proved developed reserves – Equity-accounted investments
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
—
—
—
—
—
—
—
—
—
—
—
—
8.5
5.0
9.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
108.0
604.3
(1.6)
35.1
—
0.4
(3.0)
138.9
2.1
(3.5)
0.4
(11.2)
126.7
(1.8)
100.3
(2.4)
0.8
(15.3)
208.3
37.3
35.1
(0.5)
0.6
(57.9)
618.9
37.5
(33.4)
0.4
(64.8)
558.6
27.7
106.6
(2.4)
3.3
(65.6)
628.3
8.6
12.2
13.3
8.6
12.2
13.3
123.4
112.7
162.1
537.1
502.5
545.2
8.6
12.2
13.3
8.6
12.2
13.3
219
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Gas
In bcf
Romania
and Black
Sea
Austria North Sea
Asia-
Pacific
Russia
Middle
East and
Africa
Total
Proved developed and undeveloped reserves – Subsidiaries
as of January 1, 2016
1,542.9
246.9
380.3
90.4
Revisions of previous
estimates
Disposals
Extensions and discoveries
Production
as of December 31, 2016 1
Revisions of previous
estimates
Disposals
Extensions and discoveries
Production
as of December 31, 2017 1
Revisions of previous
estimates
Purchases
Disposals
Extensions and discoveries
Production
as of December 31, 2018 1
18.9
—
1.1
(187.0)
1,375.9
24.1
(3)
0.0
(182.9)
1,214.1
77.4
—
—
3.5
(170.4)
1,124.7
13.6
—
1.1
(31.2)
230.3
23.0
—
0.0
(34.2)
219.1
8.6
—
—
—
(30.9)
196.8
33.1
(0.6)
—
(52.3)
360.5
92.8
(16.6)
—
(61.6)
375.0
110.3
—
—
4.9
(60.9)
429.4
2.7
—
—
(20.3)
72.8
5.5
—
—
(20.0)
58.4
27.1
166.1
—
—
(16.0)
235.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
114.5
2,375.0
(3.5)
—
7.0
(24.1)
93.9
(1.1)
(2)
1
(18.2)
74.3
17.3
—
(26.6)
0.3
(9.9)
55.5
64.7
(0.6)
9.1
(314.9)
2,133.4
144.4
(21.3)
1.4
(316.9)
1,941.0
240.7
166.1
(26.6)
8.8
(288.1)
2,041.9
Proved developed and undeveloped reserves – Equity-accounted investments
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
—
—
—
—
—
—
—
—
—
—
—
—
—
1,166.3
1,392.0
131.0
209.0
212.6
131.0
1,375.3
1,604.7
Proved developed reserves – Subsidiaries
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
1,208.4
1,071.9
1,026.6
148.7
141.7
120.3
155.8
159.7
410.6
72.8
58.4
202.3
—
—
—
39.6
29.2
1,625.3
1,460.9
7.3
1,767.1
Proved developed reserves – Equity-accounted investments
as of December 31, 2016
as of December 31, 2017
as of December 31, 2018
—
—
—
—
—
—
—
—
—
—
—
—
—
1,166.3
997.3
131.0
209.0
212.6
131.0
1,375.3
1,209.9
1 2018: Including approximately 68.4 bcf of cushion gas held in storage reservoirs
2017: Including approximately 68.4 bcf of cushion gas held in storage reservoirs
2016: Including approximately 72 bcf of cushion gas held in storage reservoirs
220
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
e) Standardized measure of discounted future
net cash flows
The future net cash flow information is based on the
assumption that the prevailing economic and
operating conditions will persist throughout the
time during which proved reserves will be pro-
duced. Neither the effects of future pricing changes
nor expected changes in technology and operating
practices are considered.
Future cash inflows represent the revenues received
from production volumes, including cushion gas
held in storage reservoirs, assuming that the future
production is sold at prices used in estimating year-
end quantities of proved reserves (12 months
average price). Future production costs include the
estimated expenditures for production of the
proved reserves plus any production taxes without
consideration of future inflation. Future decommis-
sioning costs comprise the net costs associated
with decommissioning wells and facilities. Future
development costs include the estimated costs of
development drilling and installation of production
facilities. For all three categories year-end costs
without consideration of inflation are assumed.
Future income tax payments are calculated on the
basis of the income tax rate applicable in each of
the countries in which the Group operates. The
present cash value results from the discounting of
the future net cash flow at a discount rate of 10%
per year. The standardized measure does not
purport to be an estimate of the fair value of the
Group’s proven reserves. An estimate of fair value
would also take into account, amongst many other
factors, the expected recovery of reserves in excess
of proved reserves, anticipated changes in future
prices and costs as well as a discount factor
representative of the risks inherent in the produc-
tion of oil and gas.
221
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Standardized measure of discounted future net cash flows
In EUR mn
Subsidiaries and equity-accounted investments
Romania
and Black
Sea
Austria North Sea
Asia-
Pacific
2018
Middle
East and
Africa
Russia
Total
20,818
3,436
5,477
1,843
3,673
12,932
48,179
(9,738)
(1,933)
(1,982)
(1,734)
(2,902)
(3,154)
(21,443)
(1,921)
(401)
(166)
(69)
—
(613)
(3,171)
9,158
(846)
1,102
3,329
(92)
(2,117)
40
61
771
(155)
9,164
23,564
(5,422)
(8,571)
8,312
1,010
1,212
101
616
3,742
14,993
(4,036)
(413)
(120)
166
(140)
(1,145)
(5,689)
4,275
597
1,092
267
476
2,597
9,304
—
—
—
—
166
152
318
18,067
2,803
4,131
551
3,080
6,390
35,021
2017
(9,927)
(1,856)
(1,922)
(489)
(2,176)
(1,346)
(17,716)
(1,811)
(381)
(273)
(24)
—
(418)
(2,907)
6,329
(447)
566
(43)
1,936
(677)
5,882
523
1,259
38
11
48
904
(223)
4,626
14,398
(2,929)
(4,308)
681
1,697
10,091
(2,643)
(119)
(192)
44
(167)
(714)
(3,790)
3,239
404
1,067
—
—
—
92
—
515
983
6,300
82
143
225
Subsidiaries
Future cash inflows
Future production and
decommissioning costs
Future development
costs
Future net cash flows,
before income taxes
Future income taxes
Future net cash flows,
before discount
10% annual discount for
estimated timing of
cash flows
Standardized measure
of discounted future
net cash flows
Equity-accounted invest-
ments
Subsidiaries
Future cash inflows
Future production and
decommissioning costs
Future development
costs
Future net cash flows,
before income taxes
Future income taxes
Future net cash flows,
before discount
10% annual discount for
estimated timing of
cash flows
Standardized measure of
discounted future
net cash flows
Equity-accounted invest-
ments
222
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Standardized measure of discounted future net cash flows
In EUR mn
Subsidiaries and equity-accounted investments
Romania
and Black
Sea
Austria North Sea
Asia-
Pacific
2016
15,489
2,481
4,697
597
(11,266)
(1,668)
(2,540)
(598)
(2,009)
(336)
(421)
(34)
2,214
(24)
478
(46)
1,736
226
(35)
17
2,189
432
1,962
(18)
Middle
East and
Africa
Russia
Total
—
—
—
—
—
—
5,056
28,321
(1,416)
(17,488)
(662)
(3,462)
2,978
(1,694)
7,370
(1,521)
1,284
5,849
(869)
(114)
(470)
54
—
(579)
(1,978)
1,321
318
1,491
—
—
—
36
—
—
—
705
3,872
110
110
Subsidiaries
Future cash inflows
Future production and
decommissioning costs
Future development
costs
Future net cash flows,
before income taxes
Future income taxes
Future net cash flows,
before discount
10% annual discount for
estimated timing of
cash flows
Standardized measure of
discounted future
net cash flows
Equity-accounted invest-
ments
f) Changes in the standardized measure of discounted future net cash flows
Changes in the standardized measure of discounted future net cash flows
In EUR mn
Subsidiaries
Beginning of year
Oil and gas sales and transfers produced, net of production costs
Net change in prices and production costs
Net change due to purchases and sales of minerals in place
Net change due to extensions and discoveries
Development and decommissioning costs incurred during the period
Changes in estimated future development and decommissioning costs
Revisions of previous reserve estimates
Accretion of discount
Net change in income taxes (incl. tax effects from purchases and sales)
Other 1
End of year
Equity-accounted investments
1 Contains movements in foreign exchange rates vs. the EUR
2018
6,300
(2,323)
4,183
2,706
133
669
(420)
983
550
(3,310)
(168)
9,304
318
2017
3,872
(1,365)
4,140
309
—
795
(536)
748
324
(1,780)
(207)
6,300
225
2016
5,546
(1,842)
(3,719)
294
3
999
(351)
1,246
517
1,279
(100)
3,872
110
223
OMV ANNUAL REPORT 2018 / FINANCIAL STATEMENTS
Vienna, March 13, 2019
The Executive Board
Rainer Seele m.p.
Chairman
Reinhard Florey m.p.
Johann Pleininger m.p.
Deputy Chairman
Manfred Leitner m.p.
224
FURTHER INFORMATION
225 – 235
226 — Consolidated Report on the Payments Made to Governments
232 — Abbreviations and Definitions
235 — Contacts and Imprint
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Consolidated Report on the Payments Made to Governments
Section 267c of the Austrian Commercial Code
Section 267c of the Austrian Commercial Code (UGB) requires that large undertakings and public inter-
est entities that are active in the extractive industry or logging of primary forests prepare the following
consolidated report on payments to governments. This section implements Chapter 10 of EU Account ing
Directive (2013/34/EU). The “Basis of preparation” paragraph provides information to the reader about
the contents of the report. This also includes information on the type of payment for which disclosure
is required and how OMV has implemented the regulations in the preparation of the report.
Basis of preparation
Reporting entities
Under the requirements of the regulation, OMV
Aktiengesellschaft is required to prepare a consoli-
dated report covering payments made to govern-
ments for each financial year in relation to extractive
activities by itself and any subsidiary undertakings
included in the consolidated Group financial state-
ments.
Activities within the scope of the report
Payments made by the OMV Group (hereafter OMV)
to governments that arose from exploration, pro-
spection, discovery, development and extraction of
minerals, oils and natural gas deposits or other
materials within extractive activities are presented
in this report.
Government
A “government” is defined as any national, regional
or local authority of a country and includes a
department agency or entity undertaking that is con-
trolled by the government authority and includes
national oil companies.
In cases where a state-owned entity engages in activ-
ities outside of its designated home jurisdiction,
then it is not deemed to be a reportable govern-
mental body for these purposes and thus payments
made to such an entity in these circumstances are
not reportable.
Project definition
The regulation also requires payments to be re-
ported on a “project” basis as well as on a govern-
ment and governmental body basis. A project is
defined as the operational activities that are gov-
erned by a single contract, license, lease, concession
or similar legal agreement and form the basis for
payment liabilities to the government. Where these
agreements as per the aforementioned definition
are substantially interconnected, these agreements
are treated for the purpose of these regulations as
a single project.
“Substantially interconnected” is defined as a set
of operationally and geographically integrated
contracts, licenses, leases or concessions or related
agreements with substantially similar terms that
are signed with a government, giving rise to pay-
ment liabilities. Such agreements can be governed
by a single contract, joint venture agreement, pro-
duction sharing agreement or other overarching
legal agreement.
There may be instances – for example, corporate
income taxes, where it is not possible to attribute
the payment to a single project and therefore
these payments are shown at the country level.
Cash and payments in kind
In accordance with the regulation, payments
have to be reported on a cash basis. This means
that they are reported in the period in which
they are paid and not in the period in which they
are accounted for on an accruals basis.
Refunds are also reported in the period in which
they are received and will either be offset against
payments made in the period or be shown as
negative amounts in the report.
Payments in kind made to a government are con-
verted to an equivalent cash value based on the
most appropriate and relevant valuation method
for each payment type. This can be at cost or
market value and an explanation is provided in
the report to help explain the valuation method.
Where applicable, the related volumes are also
included in the report.
Payment reporting methodology
The regulations require that payments are to be
reported where they are made to governments
by OMV. It is required that the report reflect the
substance of each transaction and activity. Based
on these requirements, OMV has considered its
reporting obligation as:
226
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Where OMV makes a payment directly to the
government, these payments will be reported in
full, irrespective of whether this is made in the
sole capacity of OMV or in OMV’s capacity as the
operator of a joint operation.
In cases where OMV is a member of a joint
operation for which the operator is a state-owned
entity (i.e. a government), payments made to
that state-owned entity will be disclosed where
it is possible to identify the reportable payment
from other cost recovery items.
Taxes
Taxes levied on income, production or profits of
companies are reported. Refunds will be netted
against payments and shown accordingly. Con-
sumption taxes, personal income taxes, sales taxes,
property taxes and environmental taxes are not
reported under the regulations. Although there is a
tax group in place, the reported corporate income
taxes for Austria relate entirely to the extractive
activities in Austria of OMV’s subsidiaries, with no
amounts being reported relating to OMV’s non-
extractive activities in Austria.
For host government production entitlements,
the terms of the agreement have to be consid-
ered; for the purpose of reporting in this report,
OMV will disclose host government entitle-
ments in their entirety where it is the operator.
Royalties
Royalties relating to the extraction of oil, gas and
minerals paid to a government are to be disclosed.
Where royalties are paid in kind, the value and
volume are reported.
Materiality
Payments made as a single payment or a series
of related payments that are below EUR 100,000
within a financial year are excluded from this
report.
Reporting currency
Payments made in currencies other than euros
are translated for the purposes of this report at the
average rate of the reporting period.
Payment types disclosed
Production entitlements
Under production sharing agreements (PSAs), the
host government is entitled to a share of the oil
and gas produced and these entitlements are often
paid in kind. The report will show both the value
and volume of the government’s pro duction entitle-
ment for the relevant period in barrels of oil equiv-
alent (boe).
The government share of any production entitle-
ment will also include any entitlements arising
from an interest held by a state-owned entity as
an investor in projects within its sovereign juris-
diction. Production entitlements arising from activ-
ities or interests outside of a state-owned entity’s
sovereign jurisdiction are excluded.
Dividends
In accordance with the regulations, dividends are
reported when paid to a government in lieu of
production entitlements or royalties. Dividends that
are paid to a government as an ordinary share-
holder are not reported, as long as the dividends
are paid on the same terms as that of other share-
holders.
For the year that ended December 31, 2018, OMV
had no such reportable dividend payments to a
government.
Bonuses
Bonuses include signature, discovery and pro-
duction bonuses in each case to the extent paid in
relation to the relevant activities.
Fees
These include license fees, rental fees, entry fees
and all other payments that are paid in consider-
ation for access to the area where extractive activi-
ties are performed.
The report excludes fees paid to a government
that are not specifically related to extractive activi-
ties or access to extractive resources. In addition
payments paid in return for services provided by a
government are also excluded.
Infrastructure improvements
The report includes payments made by OMV for
infrastructural improvements, such as the building
of a road or bridge that serves the community,
irrespective of whether OMV pays the amounts to
non-government entities. These are reported in
the period during which the infrastructure is made
available for use by the local community.
227
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Payments overview
The overview table below shows the relevant pay-
ments to governments that were made by OMV in
the year that ended December 31, 2018.
Of the seven payment types that are required by
the Austrian regulations to be reported upon,
OMV did not pay any dividends, bonuses or infra-
structure improvements that met the defined
accounting directive definition and therefore these
categories are not shown.
Payments overview
In EUR 1,000
Country
Austria
Kazakhstan
Madagascar
Norway
New Zealand
Pakistan
Romania
Tunisia
United Arab Emirates
Yemen
Total
Production
Entitlements
Taxes
Royalties
Fees
Total
24,033
24,848
127,898
27,619
1,923
178,477
17,981
50,946
50,946
402,779
75,726
33,490
1,777
162,918
7,361
12,567
4,836
298,675
781
414
5,911
471
633
19,684
1,271,015
1,298,909
99,759
25,629
414
133,809
61,580
4,333
361,079
25,342
1,283,582
55,782
2,051,309
No payments have been reported for Libya for the
year 2018 as OMV was not the operator.
On April 29, 2018, OMV signed a concession agree-
ment for the acquisition of a 20% stake in two oil
fields in Abu Dhabi from ADNOC. The concession
area consists of two offshore fields under develop-
ment, Umm Lulu and Satah Al Razboot (SARB),
as well as two satellite fields, Bin Nasher and Al
Bateel. The agreed participation fee amounted to
USD 1.5 bn.
On June 28, 2018, OMV closed the sale of its
Upstream companies active in Pakistan and mate-
rial payments made in 2018 prior to this date have
been reported.
On November 30, 2017, OMV acquired a stake of
24.99% in OJSC Severneftegazprom (SNGP). As
SNGP is an associated company and therefore
accounted for using the equity method in OMV
Group Consolidated Financial Statements it does
not meet the definition of a reporting entity in the
context of the Austrian Commercial Code.
228
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Payments by country
Payments by country
In EUR 1,000
Austria
Governments
Federal Ministry for Digital and
Economic Affairs
Federal Ministry of Finance
Total
Projects
Lower Austria
Total
Kazakhstan
Governments
State Revenue Committee
Training centers universities
Total
Projects
Tasbulat
Komsomolskoe
Total
Production
Entitlements
Taxes
Royalties
Fees
Total
24,033
24,033
75,726
75,726
24,033
24,033
75,726
75,726
24,848
24,848
9,926
14,922
24,848
75,726
24,033
99,759
99,759
99,759
25,062
567
25,629
10,459
15,170
25,629
414
414
414
414
5,834
127,975
133,809
51
51
5,905
127,802
133,809
229
214
567 1
781
533
248
781
414
414
414
414
5,834
77
5,911
5,905
6
5,911
1 Financing of various expenses with regard to university training centers as agreed within the concession agreement
Madagascar
Governments
Office des Mines Nationales
et des Industries Stratégiques
Total
Projects
Explorations
Total
Norway
Governments
Oljedirektoratet
Skatteetaten
Total
Projects
Gulfaks
Gudrun
Norway Exploration Projects
Payments not attributable to projects
Total
127,898
127,898
51
51
127,796
127,898
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Payments by country
In EUR 1,000
New Zealand
Governments
Crown Minerals
Inland Revenue
Ministry of Business and Innovation
Environmental Protection Authority
Maritime Safety Authority
Total
Projects
Maari
Maui
Pohokura
New Zealand exploration projects
Payments not attributable to projects
Total
Pakistan
Governments
Federal Board of Revenue Government
of Pakistan
Director General of Petroleum Concessions
Local Government, District Sukker
Total
Projects
Mehar
Miano
Sawan
Pakistan exploration projects
Payments not attributable to projects
Total
Romania
Governments
State budget
Local councils
National Agency for Mineral Resources (ANRM)
National Company of Forests
CONPET SA
National Authority for Electricity Regulation
(ANRE)
Offshore Operations Regulatory Authority
(ACROPO)
Total
Projects
Onshore production zones
Onshore Joint Ventures
Offshore Black Sea
Payments not attributable to projects
Total
230
Production
Entitlements
Taxes
Royalties
Fees
Total
33,490
27,456
163
27,619
33,490
10
2
689
152
26,766
27,619
6,770
1,926
24,794
33,490
1,923
1,777
1,923
1,777
432
258
1,087
1,777
1,923
1,923
178,477
162,918
178,477
162,918
33,490
27,456
292
231
111
61,580
7,069
1,928
25,483
334
26,766
61,580
1,923
2,149
261
4,333
636
584
1,151
39
1,923
4,333
129
231
111
471
289
182
471
372
261
633
204
326
64
39
633
4,840
566
13,425
106
341,395
4,840
566
13,425
106
569
569
178
19,684
178
361,079
123,809
1,233
37,876
162,918
18,901
10
217
556
19,684
142,710
1,243
38,093
179,033
361,079
178,477
178,477
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Payments by country
In EUR 1,000
Tunisia
Governments
Receveur des Finances
Receveur des Douanes
Entreprise Tunisienne d’Activités Pétrolières
Tresorerie Generale de Tunisie
Total
Projects
TPS
South Tunisia
Total
Production
Entitlements
Taxes
Royalties
Fees
Total
16,418
1,563
17,981
11,299
6,682
17,981
6,848 1
513
7,361
7,361 1
7,361
16,418
1,563
6,848
513
25,342
11,299
14,043
25,342
1 Includes payments in kind for 112,781 bbl of crude oil valued using the average monthly price per boe
In Tunisia where OMV is not the operator, its pro-
portional contribution to the host government’s
royalties for 2018 would have been EUR 6.42 mn
for 113,890 bbl of crude oil valued using the average
monthly price per boe.
Payments by country
In EUR 1,000
United Arab Emirates
Governments
Abu Dhabi National Oil Company (ADNOC)
Emirate of Abu Dhabi - Finance Department
Total
Projects
Umm Lulu and SARB
Total
Yemen
Governments
Ministry of Oil & Minerals
Total
Projects
Block S2
Total
Production
Entitlements
Taxes
Royalties
Fees
Total
12,567
12,567
905
1,270,110
1,271,015
905
1,282,677
1,283,582
12,567
12,567
1,271,015
1,271,015
1,283,582
1,283,582
50,946 1
50,946
50,946 1
50,946
4,836 2
4,836
4,836 2
4,836
55,782
55,782
55,782
55,782
1 Payments in kind for 882,342 boe valued at prices set by the Yemen Crude Oil Marketing Directorate
2 Payments in kind for 83,738 boe valued at prices set by the Yemen Crude Oil Marketing Directorate
Vienna, March 13, 2019
The Executive Board
Rainer Seele m.p.
Johann Pleininger m.p.
Reinhard Florey m.p.
Manfred Leitner m.p.
231
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Abbreviations and Definitions
A
ACC
Austrian Commercial Code
ACCG
Austrian Code of Corporate
Governance
AGM
Annual General Meeting
B
bbl
Barrel (1 barrel equals
approximately 159 liters)
bbl/d
Barrels per day
bcf
Billion standard cubic feet
(60 °F/16 °C)
bcm
Billion standard cubic meters
(32 °F/0 °C)
bn
Billion
boe
Barrel of oil equivalent
boe/d
Barrel of oil equivalent per day
C
CAPEX
Capital Expenditure
capital employed
Equity including non-controlling
interests plus net debt
cbm
Standard cubic meters
(32 °F/0 °C)
cf
Standard cubic feet
(60 °F/16 °C)
CCS/CCS effects/inventory
holding gains/(losses)
Current Cost of Supply; inven-
tory holding gains and losses
represent the difference between
the cost of sales calculated using
the current cost of supply and
the cost of sales calculated using
the weighted average method
after adjusting for any changes
in valuation allowances in case
the net realizable value of the
inventory is lower than its cost.
In volatile energy markets, mea-
surement of the costs of petro-
leum products sold based on
historical values (e.g. weighted
average cost) can have distort-
ing effects on reported results
(Operating Result, net income,
etc.). The amount disclosed as
CCS effect represents the differ-
ence between the charge to the
income statement for inventory
on a weighted average basis
(adjusted for the change in valu-
ation allowances related to net
realizable value) and the charge
based on the current cost of
supply. The current cost of supply
is calculated monthly using data
from supply and production
systems at the Downstream Oil
level
CEE
Central and Eastern Europe
CEGH
Central European Gas Hub
CGU
Cash generating unit
Clean CCS Operating Result
Operating Result adjusted for
special items and CCS effects.
Group clean CCS Operating
Result is calculated by adding
the clean CCS Operating Result
of Downstream Oil, the clean
Operating Result of the other
segments and the reported con-
solidation effect adjusted for
changes in valuation allowances,
in case the net realizable value
of the inventory is lower than
its cost
Clean CCS EPS
Clean CCS Earnings Per Share
is calculated as clean CCS net
income attributable to stock-
holders divided by weighted
number of shares
Clean CCS net income
attributable to stockholders
Net income attributable to stock-
holders, adjusted for the after
tax effect of special items and
CCS
Clean CCS ROACE
Clean CCS Return On Average
Capital Employed is calculated
as NOPAT (as a sum of current
and last three quarters) adjusted
for the after-tax effect of special
items and CCS, divided by aver-
age capital employed (%)
Co&O
Corporate and Other
E
EFET
European Federation of Energy
Traders
EPS
Earnings Per Share;
net income attributable to stock-
holders divided by total weighted
average shares
232
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
EPSA
Exploration and Production
Sharing Agreement
equity ratio
Equity divided by balance sheet
total, expressed as a percentage
K
kbbl
Thousand barrels
N
n.a.
Not available
kbbl/d
Thousand barrels per day
n.m.
Not meaningful
EU
European Union
EUR
Euro
F
kboe
Thousand barrels of oil
equivalent
kboe/d
Thousand barrels of oil
equivalent per day
FX
Foreign exchange
km2
Square kilometer
G
GDP
Gross Domestic Product
gearing ratio
Net debt divided by equity,
expressed as a percentage
H
H1, H2
First, second half of the year
HSSE
Health, Safety, Security, and
Environment
I
IASs
International Accounting
Standards
IFRSs
International Financial
Reporting Standards
KPI
Key Performance Indicator
KStG
Austrian Corporate Income
Tax Act
L
LNG
Liquefied Natural Gas
LTIR
Lost-Time Injury Rate
per million hours worked
M
min
Minute
mn
Million
MPPH
Mubadala Petroleum
and Petrochemicals Holding
Company L.L.C
MW
Megawatt
MWh
Megawatt hour
NCG
Net Connect Germany
net assets
Intangible assets, property, plant
and equipment, equity-accounted
investments, investments in
other companies, loans granted
to equity-accounted investments,
total net working capital, less
provisions for decommissioning
and restoration obligations
net debt
Interest-bearing debts including
bonds and finance lease
liabilities less liquid funds
(cash and cash equivalents)
net income
Net operating profit or loss
after interest and tax
NGL
Natural Gas Liquids; natural
gas that is extracted in liquid
form during the production
of hydrocarbons
NOK
Norwegian krone
NOPAT
Net Operating Profit After Tax;
Net income
+ Net interest related to
financing
– Tax effect of net interest
related to financing
NOPAT is a KPI that shows the
financial performance after tax,
independent of the financing
structure of the company.
NZD
New Zealand dollar
233
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
ROE
Return On Equity; net income/
loss for the year divided by
average equity, expressed as a
percentage
T
t
Metric ton
toe
Metric ton of oil equivalent
TRIR
Total Recordable Injury Rate
TRY
Turkish lira
TSR
Total Shareholder Return
TWh
Terawatt hour
U
UAE
United Arab Emirates
USD
US dollar
ROFA
Return On Fixed Assets, EBIT
divided by average intangible
and tangible assets expressed
as a percentage
RONA
Return On Net Assets; NOPAT
divided by average net assets,
expressed as a percentage
RON
New Romanian leu
RRR
Reserve Replacement Rate;
total changes in reserves
excluding production, divided
by total production
RUB
Russian ruble
S
sales revenues
Sales excluding petroleum
excise tax
Special items
Special items are expenses and
income reflected in the financial
statements that are disclosed
separately, as they are not part
of underlying ordinary business
operations. They are being
disclosed separately in order to
enable investors to better under-
stand and evaluate OMV Group’s
reported financial performance
O
OECD
Organisation for Economic
Cooperation and Development
OPEX
Operating Expenditures; cost of
material and personnel during
production, excluding royalties
ÖBAG
Österreichische Beteiligungs AG
P
payout ratio
Dividend per share divided by
earnings per share, expressed
as a percentage
Pearl
Pearl Petroleum Company
Limited
PJ
Petajoule, 1 petajoule
corresponds to approx. 278 mn
kilowatt hours
Q
Q1, Q2, Q3, Q4
First, second, third, fourth
quarter of the year
R
ROACE
Return On Average Capital
Employed; NOPAT divided by
average capital employed
expressed as a percentage
234
OMV ANNUAL REPORT 2018 / FURTHER INFORMATION
Contacts and Imprint
OMV Aktiengesellschaft
Trabrennstrasse 6 – 8
1020 Vienna, Austria
Tel. + 43 1 40440-0
info@omv.com
www.omv.com
OMV Petrom SA
Strada Coralilor 22, sector 1
013329 Bucharest, Romania
Tel. + 40 372 161930
Fax + 40 372 868518
investor.relations.petrom@petrom.com
Investor Relations
Florian Greger
OMV Aktiengesellschaft
Trabrennstrasse 6 – 8
1020 Vienna, Austria
Tel. + 43 1 40440-21600
Fax + 43 1 40440-621600
investor.relations@omv.com
Publisher
OMV Aktiengesellschaft, Vienna
Concept and design
klar. & Erdgeschoss & Schreibkraft, Vienna
Photos
Title: Andreas Jakwerth
Pages 1, 4 – 5, 27, 30 – 31, 33: Andreas Jakwerth;
Pages 6 – 7: GettyImages David Gray; Pages 8 – 9,
19, 21: OMV Aktien gesellschaft; Pages 10 – 11:
Getty Images Jose A. Bernat Bacete; Pages 12 – 13:
Alexander Schleissing; Pages 14 – 15: GettyImages
DTP; Pages 16 – 17: Getty Images Niels Busch; Page
18: Equinor Bjørn Ivo Krokeid; Page 20: Ionity
Image editing
Kristina Reissland
Notes
Produced inhouse with FIRE.sys
Further publications
OMV Factbook
www.omv.com/factbook
OMV Sustainability Report
www.omv.com/sustainability-report
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Notes:
Figures in the tables and charts may not add up due to
rounding differences.
In the interest of a fluid style that is easy to read,
non-gender-specific terms have been used in the notes
chapter of this annual report.
Disclaimer regarding forward-looking statements
This report contains forward-looking statements. Forward-
looking statements usually may be identified by the use of
terms such as “outlook,” “believe,” “expect,” “anticipate,”
“intend,” “plan,” “target,” “objective,” “ estimate,” “goal,” “may,”
“will” and similar terms, or by their context. These forward-
looking statements are based on beliefs, estimates and
assump tions currently held by and information currently avail-
able to OMV. By their nature, forward-looking statements are
subject to risks and uncertainties, both known and unknown,
because they relate to events and depend on circumstances
that will or may occur in the future and are outside the control
of OMV. Consequently, the actual results may differ materi-
ally from those expressed or implied by the forward-looking
statements. Therefore, recipients of this report are cautioned
not to place undue reliance on these forward-looking state-
ments. Neither OMV nor any other person assumes respon-
sibility for the accuracy and complete ness of any of the for-
ward- looking statements contained in this report. OMV dis -
claims any obligation and does not intend to update these
forward-looking statements to reflect actual results, revised
assumptions and expectations, and future developments
and events. This report does not contain any recommendation
or invitation to buy or sell securities in OMV.
235
OMV AktiengesellschaftQuarterly Report 2018Q4The energy for a better life.7 Annual Report 2018reasons why we’re excited about tomorrow OMV AktiengesellschaftFACTBOOK 2017Share PriceEUR 38.25Annual Report 2018Factbook 2017 OMV Aktiengesellschaft
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