Driving the energy transition - it will be upon us
Oil & gas is a key industry in the transformation towards a sustainable global economy. OMV CEO Alfred Stern outlines the prerequisites for success and the path his company has just embarked on.
The number of people enjoying improved standards of living is steadily increasing – and it is estimated to continue to rise globally. At the same time, the natural resources needed for this development will decrease at an accelerated speed. They will not grow back. Our industry faces this dilemma, and we strive to be part of the solution. There is a clear call for action. We must commit ourselves to the energy transition as one of the biggest tasks our industry has ever faced. We need to be prepared to think outside the box and leave nothing unquestioned. Neither well-held beliefs, nor our own needs as corporations or individuals. It’s time to turn challenges into opportunities.
By 2050, we commit to becoming carbon neutral. Our new Strategy 2030 “From Value Chain to Value Circle” outlines our transformation from a traditional oil and gas business towards a leading supplier of sustainable fuels, chemicals, and materials with a focus on circular economy solutions. This will include anchoring existing and new strategic business areas in sustainability and innovation, as well as investing in strategic business opportunities of the future.
We build on combined OMV’s and Borealis’ intellectual capital and competencies coupled with financial strength. Our integrated European refinery sites and innovation centers will be integral to the implementation of our strategy. Our globally patented ReOil technology, as well as the co-processing of used cooking oil into sustainable aviation fuel, and the construction of Austria’s largest hydrogen electrolysis plant are just three examples.
While reducing the overall hydrocarbon production in our upstream business, we aim to increase the gas production share to more than 60%, reflecting its role as transition energy that enables the use of renewables. At the same time, we will invest in exploring geothermal energy use for heating and renewable electricity production on a broad scale, as well as carbon capture and storage, leveraging existing assets and capabilities.
Against this background, OMV’s presence in the Middle East will become even more important in the future. As the only fully integrated supplier that has partnerships with ADNOC along the entire value chain all the way to chemicals and materials, we are ideally positioned to seize further growth opportunities. We highly appreciate our long-lasting reliable partnership with our second-largest shareholder Mubadala and our strategic partner ADNOC. Technological excellence, exploration and production licenses, refining operations, petrochemicals production, and joint trading activities, make this region an important hub for future collaboration and innovation.
The Borouge joint venture between Borealis and ADNOC is a testament to this partnership. Our industry’s future is characterised by both challenges and opportunities. For example, only 14% of plastic packaging is collected for recycling today, while the vast majority is landfilled, incinerated, or leaks into the environment. Which players will be best positioned to compete for this valuable resource? Will national and supranational regulators create legislation supporting circularity initiatives? How quickly will we be able to produce green hydrogen and at what price? How will markets respond to disruptive developments like wars and pandemics?
Times in which old approaches no longer work and new ones are not yet born cause uncertainty. But they also hold opportunities and possibly promises. It is upon us to turn them into reality together.
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