INVESTOR PRESENTATION. March 2011

Transcription

1 INVESTOR PRESENTATION March 2011

2 LEADING EUROPEAN INTEGRATED COMPANY Integrated portfolio based on 3 pillars UPSTREAM DOWNSTREAM GAS & POWER Electricity supply E&P R&M Petchem Crude to plastic integration Gas Storage & Power Gas value chain Gas Transmission Unbundling Data MMboe SPE 2P reserves 144 Mboe/day production Production in 7, exploration in 12 countries 5 refineries, 470 thbpd 21.6 Mtpa sales 1,600+ filling stations 2 petchem plants 880 kt ethylene, 1.2Mt polymer cap. 1.9 bcm UGS capacity 5,560 km pipeline in Hungary Competitive advantages Over 70-year experience in CEE Over 20-year international presence Well-positioned player in the Middle East Outstanding exploration drilling success One of the lowest lifting cost in Europe Top assets with high net cash margin Strong landlocked market position The largest integrated olefin and polymer player in CEE EUR-base return on storage Good geographical position CEZ partnership International transit Good geographical position Growth drivers Field development driven growth in the short term Long term growth based on existing exploration portfolio Efficiency improvements and synergy through joint optimization of assets Focus on Rijeka refinery upgrade Above average growth in sales Monitoring to develop diversified generation portfolio High regulatory risk Currently not a growth driver EBITDA (2010 %) EBITDA (2010 %) EBITDA (2010 %) Refinery Petchem unit UGS Previous pipeline developments Potential development 2

3 MORE INTERNATIONAL, MORE DIVERSIFIED, MORE UPSTREAM DRIVEN Outstanding growth in the last 5 years EBITDA* by segment Increasing EBITDA* generation outside Hungary USD mn E&P DS G&P C&O USD mn Hungary Foreign countries CAPEX by segment Increasingly international workforce USD mn E&P DS G&P C&O Hungary Slovakia Croatia Other *EBITDA excluding special items. 3

4 UPSTREAM - POSITIONING AS A STRONG GROWTH PILLAR OF MOL GROUP Maintaining reserve and production at elevated levels in the long-term Macro trends Key strengths to build upon Continuously increasing oil prices Promising well balanced E&P portfolio Rising upstream spending at integrated oil companies High exploration success rate Unit cost started to increase Increasing multinational workforce IOCs pushed to frontier areas facing higher geological, political and technological risks Increasing optimal project size MOL and INA complementary skill base Proven track record in successful portfolio development and project execution Growth drivers Organic Efficiency improvement Competency based target setting based on our experiences and capabilities: more than 70 years of experience in Hungary, over 20 years of experience in international exploration Pursue dynamic exploration-led strategy as the main driver of long-term growth Transforming existing exploration assets to production in the medium-term Focus on field development with immediate cash generation, quick return Strong commitment to maintain reserve & production at elevated levels Inorganic Active portfolio management Continuous monitoring of inorganic growth opportunities with dynamic exploration focus 4

5 DOWNSTREAM - REINFORCE REGIONAL STRONGHOLD POSITION Focus on market reach and efficiency Macro trends Key strengths to build upon Weak OECD, strong Emerging Markets demand matched with Asian refinery expansions Gradual improvement, slow recovery of crack spreads Regional growth continues to boost middle-distillate demand Low carbon products and technologies become value drivers Market driven asset development Integrated operation through the whole value chain Proven track record in outstanding efficiency Value extraction through commercial position and logistics services on core markets Organic growth Efficiency improvement Selective inorganic steps Reinforce Regional Stronghold position with increased market share in motor fuels Focus on integration of Croatian Downstream and elevate Rijeka refinery to similar levels represented by Duna and Bratislava refineries Continue efficiency improvement at the group level Exploit group level synergies, increase flexibility Reinforce retail and logistical networks to further strengthen our market position 5

6 TOP EFFICIENCY IN EUROPE BOTH IN UPSTREAM AND DOWNSTREAM Committed to keep efficiency as top priority Previous Successes Further potentials & Upstream Leading European low cost onshore producer * One of the lowest lifting cost among European Upstream players * Outstanding exploration success rate Proven track record of successful project execution ranging geological surveys to large scale production at major projects In-house drilling and oil service companies Reduce Croatian lifting cost closer to MOL levels Downstream Proven track record in cutting edge asset development and in leveraging Downstream profitability 2 top refineries with one of the highest net cash margin in Europe for a decade** Elevate Rijeka Refinery to the top league Further synergies from joint optimization of Downstream value chain with 5 refineries and 2 petchem units Improve effectiveness of regional distribution system Overall efficiency improvement in Croatia USD/boe Unit Lifting costs* USD/boe Net income per unit* Net Cash Margin ranking of European refineries** (2009) peers avg. peers avg. Bratislava Duna Rijeka Sisak Mantova * IHS Herold Database ** Source: WoodMackenzie 15% return threshold for new investments 6

7 DISCIPLINED CAPEX PROGRAM WITH E&P FOCUS IN CAPEX should be fully financed from operating cash flow UPSTREAM DOWNSTREAM USD 5.5 bn CAPEX for Focus on high return development projects Exploration with international focus is targeting reasonable resource base Minimizing natural decline in the CEE region Maintaining production level in CIS Key regions: Syria, Hungary, Kurdistan, Croatia and Russia Group level optimization of refinery upgrade projects Top priority objective is to elevate Rijeka refinery s performance to Duna and Bratislava superior performance Focus on maintenance and sustain safe Petrochemicals operation USD 1.7 bn CAPEX for 2011 CAPEX by segment in USD ( ) E&P DS G&P C&O target Premises 2011E 2012E 2013E Brent dated (USD/bbl) Brent -Ural spread Crack Spread - Gasoline 10ppm FOB ROTT (USD/t) Crack Spread - Gas oil 10ppm FOB ROTT (USD/t) Crack Spread Fuel Oil 3.5 FOB MED (USD/t) (191) (194) (201) Integrated petrochemical margin USD/HUF average

8 MAINTAINING STRONG FINANCIAL POSITION Keep covenants in the safe zone Covenants Maturity profile 3,5 3 2,5 2 1, M EUR Note: as of 31 December , EBITDA Net debt to EBITDA Long term loan (multilaterals) Hybrid Money market deposits Bonds Medium term loan Short term loan Undrawn medium term facility MOL Group aims to maintain its strong and stable financial position on the group level Keeping the Net Debt to EBITDA level at around 2 under normal business circumstances 8

9 SENSITIVITY ANALYSIS 2011E MOL Group Effect on FY operating profit (HUF bn) Upstream Downstream Other Group +/- 10 USD/bbl crude oil price movement (with fixed crack spread and petrochemical margin) +/ / / / /- 10 USD/HUF, with fixed crack spreads +/ / / / /- 10 EUR/HUF, with fixed crack spreads +/ / / / /- 10 USD/t Crack spread change (R&M) +/ / /- 10 EUR/t integrated petrochemical margin change +/ / /- 1 USD/bbl Brent-Ural spread +/ / MOL exposure MOL exposure Oil business USD based (dollar input, dollar based output unless extreme conditions) Petrochemicals: USD based input, EUR based output Gas transmission: mainly regulated HUF tariff revenues, HUF costs Overall currency exposure: long USD, long EUR 9

10 EXPLORATION AND PRODUCTION Focus on exploration and active portfolio management 10

11 PRODUCTION ACTIVITIES IN 7 COUNTRIES Provide a good basis for the next three years CEE onshore Croatia, Hungary Reserves: MMboe Production: 85,100 boepd CEE offshore Croatia Reserves: 56.8 MMboe Production: 22,700 boepd Russia ZMB Reserves: 38.5 MMboe Production: 12,000 boepd Baitugan Reserves: 61.9 MMboe Production: 4,600 boepd Matjushkinskiy Block Reserves: 29.4 MMboe Production: 3,000 boepd Production: 144 Mboepd Reserves: 619 MMboe Syria Hayan Block Reserves: 45.7 MMboe Production: 7,900 boepd Pakistan Tal Block Reserves: 11.9 MMboe Production: 4,700 boepd Other International Egypt Ras Qattara, West Abu Gharadig, North Bahariya, Sidi Rahman Angola 3/05 Block, 3/85 Block, 3/91 Block Total reserves: 8.0 MMboe Total production: 3,500 boepd Production breakdown by countries and products, 2010 Reserves breakdown by countries and products, % 3% 3% 5% 37% 10% 34% 21% 7% 2%1% 28% 8% 43% 49% 38% 56% Hungary Croatia Russia Syria Pakistan Other Oil Gas Condensate Note: SPE 2P reserves. Reserves and production of non-consolidated projects are not highlighted. Hungary Russia Pakistan 41% Croatia Syria Other Oil Gas Condensate 11

12 EXPLORATION ACTIVITIES IN 12 COUNTRIES TO SECURE GROWTH Exploration potential of current assets: 1,650 MMboe* CEE onshore, offshore, unconventional Hungary, Croatia, Romania 490 Hungary, Croatia, Romania Recoverable resource potential*: 145 MMboe 120 Russia Matjushkinskiy, Surgut-7, Baitex Blocks 50 Kazakhstan Federovskoye Block Kurdistan Region of Iraq Akri-Bijeel, Shaikan Blocks Pakistan Tal, Margala & Margala North, Karak Blocks MMboe Estimated recoverable resource potential* 200 Other International Cameroon, Angola, Oman, India, Syria USD mn 200 Increasing exploration activity with new focus areas Exploration CAPEX No. of wells 50 Outstanding exploration success rate ( ) Average: USD 90 mn % 48% Hungary International *Working Interest (unrisked). 0 CEE Total drillings International Successful drilling 12

13 RESERVE REPLACEMENT IS SUPPORTED BY THE EXPLORATION PORTFOLIO BUILT IN THE LAST 5 YEARS - Upstream cash cycle Recoverable Resource Potential, WI (MMboe) Strong focus on adding further exploration potential to the portfolio MMboe E Exploration Development Acqusition CAPEX (USD mn) CAPEX Resource Reserve 0 CEE CIS Kurdistan Pakistan Other Total Resources Resources / Reserves Focusing on field development with key projects in Syria, Pakistan, Russia, Hungary and Croatia Increased conventional exploration activities compared to previous years targeting significant resource potential, aiming an average 3-4% annual production growth beyond 2013 Exploring basins with unconventional potential in the CEE region Increased EOR/EGR/IOR activities in order to exploit full potential of existing proved resource base and decrease natural decline rate of matured fields Strengthening exploration activity to increase resource base EBITDA Production MMboe Focus on turning resource potential to reserves 0 15 international exploration licenses were added to the portfolio since 2005 with the aim of increasing our reserve base CEE CIS Pakistan Syria Other Total Reserves SPE 2P reserves (MMboe)

14 PRODUCTION GROWTH IS SECURED BY RECENT KEY FIELD DEVELOPMENT PROJECTS IN Upstream cash cycle 2. Upstream increased its Group EBITDA contribution from 30% in 2005 to nearly two-third in 2010 Stable production expected around Mboe/d between The exploration led strategy creates a solid basis to increase the production level as well as the EBITDA level providing a stronger growth engine for MOL Group EBITDA is further boosted by efficiency improvement activities Optimization of portfolio on Group level CEE production decreases due to the natural decline Russia: production decreases from 2010 to 2011 due to the field maturity of ZMB project which is expected to be offset from 2012 by exploration and field development turning into production in other Russian assets Optimization of production costs and maintenance activities in Croatia USD 50 mn target is already delivered in 2010 Harmonizing procurement and HSE activities Rationalization of operations of service companies EBITDA excluding special items (USD mn) 1 CAPEX Resource Reserve Syrian production is planned to reach peak during Pakistan: significant increase is planned from 2011 due to further wells becoming operational. Expected production by region (Mboe/d) 2000 EBITDA Production E 2012E 2013E CEE CIS Syria Pakistan Other international International contribution expected to increase further Average 3-4% annual production expected to increase beyond 2013 from existing exploration portfolio (1) EBITDA includes INA contribution from H

15 WELL BALANCED UPSTREAM PORTFOLIO Outstanding growth potential through existing exploration portfolio EXPLORATION AND APPRAISIAL DISCOVERY OF FIELDS FIELD DEVELOPMENT DEVELOPED FIELDS READY FOR PRODUCTION PRODUCTION AND EOR/IOR CONTRIBUTION TO OTHER DIVISIONS CAPEX Medium CAPEX High CAPEX and Technology Small CAPEX and moderate/high OPEX and technology In case of EOR/IOR projects medium/high CAPEX TIME Exploration phase takes 3-4 years Appraisal phase takes 2-3 years Development phase takes 4-5 years Production phase takes years EOR/IOR phase takes years Value creation during the project life-cycle Key projects Value Risks Exploration KA KZ R O P E KS P T Appraisal Discovery Development Dominantly geological, technical, political risks S A ZMB The majority of value creation happens in exploration phase however the risk is also higher. Maturity (EOR/IOR) O during the different phases while marketability risk also appears Time Time O A S KA KS P T P E R O ZMB KZ CEE Onshore CEE Adriatic offshore Syria Hayan block Kurdistan Region of Iraq Akri Bijeel block Kurdistan Region of Iraq Shaikan block Pakistan Tal block Pakistan Karak and Margala block Russia MOL s operated portfolio Russia ZMB Kazakhstan 15

16 CEE ONSHORE PRODUCTION AND FIELD DEVELOPMENT Maximize recovery rates from existing fields Upstream CAPEX share Production outlook (Mboepd) 1 2P reserves (2010): MMboe Production (2010): 85,100 boepd Competitive advantage in the region More than 70 years exploration and production experience in Hungary Leading European low cost on-shore producer Existing infrastructure (pipelines) and appliances Comprehensive geological knowledge Among the first companies in Europe using EOR/IOR/EGR technologies Work program E E 2012E 2013E Hungary: 9 field developments in progress, 8 new field development projects Successful partnerships Lifting cost*/boe in Europe ( ) Croatia s efficiency improvement in focus Croatia: 3 new wells and continued implementation of EOR project on Ivanić and Žutica fields Hungary: 4-7 field development projects Croatia: 5-8 field development projects Extensive EOR/IOR/EGR activities Hungary: MMboe additional reserve potential increasing both reserves and production Croatia: previously unexploited opportunity Extra production means additional profit contribution for the extended lifetime of HCfields USD/boe peers avg. Optimization of production costs and maintenance activities Group level harmonization of procurement Project management improvement Knowledge transfer Rationalization of service companies operation USD 50 mn EBITDA improvement is already delivered in 2010 *Includes Shipping/Transportation/Handling Expenses, Taxes other than Income, and Production Related G&A Sources: IHS Herold database 1 pro-forma 2009: assuming FY INA contribution 16

17 CEE ONSHORE EXPLORATION Exploiting further upside potential - low risk, medium term stable growth projects Upstream CAPEX share CAPEX by countries % 32% Hungary (conventional) 36% 19% Hungary (unconventional) Croatia Romania Estimated recoverable resource potential*: 125 MMboe (excluding offshore and unconventional) Significant efforts in order to minimize the decrease of current production Competitive advantage in the region Exceptional success ratio: successful well ratio was 70% in Hungary in the last 5 years, further successes are expected with similar structures to be drilled EOR/IOR/EGR activities Unconventional exploration *Working Interest (unrisked), Exploration in Romania Partnership with Expert Petroleum (EP) since % MOL operator, 30% EP Recoverable resource potential: 40 MMboe Further onshore and offshore potential Blocks are located in the vicinity of successful Hungarian fields Work program E 2011 Hungary: 10 conventional and 2 tight gas (unconventional) drillings, 1 optional seismic acquisition Croatia: drilling of exploratory 2 wells, Međimurje Surface Geochemical Survey Dinaridi Source Rock Study Romania: 700 km 2 3D seismic acquisition Hungary: 4 seismic acquisition, drilling of wells Croatia: 8-10 exploratory wells, 2D and 3D seismic acquisitions Romania: km 2D seismic, km 2 3D seismic and exploration wells in 3 years Unconventional exploration Benefiting from MOL s local strengths (local geology, acreage position, well-developed infrastructure) Focusing on Derecske basin: Successful drilling in 2010 Well tests in 2011 Q : 4 wells/tests 17

18 CEE OFFSHORE PROVIDES STABLE PRODUCTION IN COMING YEARS Further exploration potential in Central and South Adriatic region Upstream CAPEX share Production outlook (Mboepd) E 2012E 2013E Work program E 2P reserves (2010): 56.8 MMboe Production (2010): 22,700 boepd 3 exploration licenses and PSA contracts Ivana (E, D, P): 50% INA; 50% Eni; operator INAgip Aiza-Laura (P): 50% INA; 50% Eni; operator INAgip Izabella - (D): 30% INA; 70% Edison; operator EdINA Exploration Block Ivana 2011 Operational and geological program for exploration wells Drilling one well on Ivana South West area Post appraisal studies for Ivana South West area Regional geochemical and mineralogical studies Development 2011 Preparation of feasibility study, sea bottom survey (Ika, Ivana, Božica) Engineering, construction and installation of booster unit (Ivana) Development of recent discoveries Drilling of 2-4 exploration wells E: Exploration, D: Development; P: Production In the Central and South Adriatic offshore areas, where no activities have yet been started, we see further potential in long-term. 1 pro-forma 2009: assuming FY INA contribution 18

19 SYRIA HIGH GROWTH IN HAYAN BLOCK Further exploration opportunity in the Aphamia Block Upstream CAPEX share Production outlook (Mboepd) E 2012E 2013E 2P reserves (2010): 45.7 MMboe Production (2010): 7,900 boepd Estimated peak production: 24,500 boepd in Hayan Block: development phase 50% INA; operator; SPC (50%) 6 oil, gas and condensate fields: Jihar (oil and gas field), Al Mahr (gas field), Jazal (oil field), Palmyra (gas field), Mustadira (gas field), Mazrur (oil and gas field) Aphamia Block exploration phase 100 % INA, operator 1 pro-forma 2009: assuming FY INA contribution Work program E Exploration activity started in 1998 and was completed in First oil production started in 2005 on Jihar Field, first gas production started in 2006 on Palmyra Field. Hayan Block 2011 Gas Treatment Plant operating from 2011, resulting in (1) significant increase in oil, condensate and gas production (2) LPG production to be started through GTP Drilling 3 production wells, workover on one well and construction works to be carried out New exploration project is planned to start in Drilling of 6-8 production wells, extending production facilities Aphamia Block Two exploration wells, Beer As Sib -1 and Mudawara -3 were drilled and confirmed HC saturation of the structures in 2010 Based on the positive test results of Beer As Sib -1 well further exploration activities are planned therefore the second extension of the initial exploration phase was made A subhorizontal pilot well (Beer As Sib -2H) is planned for 2011 to increase the production rate and to achieve commercial production 19

20 KURDISTAN REGION OF IRAQ Potential company-maker with large resource potential Upstream CAPEX share Test results Akri Bijeel Block: testing of Bijell-1 exploration well resulted in 3,700 boepd oil and 100 boepd gas Shaikan Block: testing of Shaikan-1 well resulted in 7,000 boepd oil production, while Shaikan-3 well has achieved a rate of 9,800 boepd production Estimated recoverable resource potential*: 725 MMboe Estimated peak production**: 64,000-76,000 boepd in 2019 Akri Bijeel Block - Exploration 80%(undiluted) MOL operator; 20% GKP Expected first oil: 2017 Shaikan Block - Exploration 20% (undiluted) MOL; 80% GKP operator Expected first oil: 2015 Akri Bijeel Block Work program E Deepening and testing of 3 exploration wells until Q3 2012: Bekhme-1 expl. well between Q1-Q3 2011, Bakrman-1 exploration well between Q Q Gulak-1 exploration well in Q2-Q appraisal well planned to be drilled in 2011 and 2 in 2012 Significant seismic is also planned for Q Early development project is planned from 2012, work program consists of the construction of surface facilities, finished by Q Infrastructure Shaikan Block Early development project started from H2 2010, the surface facilities were constructed 2011 Appraisal of the discovery made with Shaikan-1 Deepening of additional 4 appraisal wells Finishing appraisal wells and tests Submission of appraisal report and development plan Commencement of field development, building surface facilities Oil and condensate: The Kirkuk-Ceyhan oil pipeline has a maximum capacity of 1,600 Mboepd, out of which currently approx. 500 Mboepd is used. *Working Interest (unrisked) **Entitlement (unrisked), calculated with diluted shares. 20

21 CIS COUNTRIES STABLE PRODUCTION IN THE FORTHCOMING YEARS Putting recent discoveries in Kazakhstan into operation Upstream CAPEX share Production outlook (Mboepd) 1 Russia Kazakhs tan E 2012E 2013E Russia 2P reserves (2010): MMboe Production (2010): 19,600 boepd Significant production increase is expected beyond 2013 Estimated recoverable resource potential*: 120 MMboe ZMB (P): 50% MOL, Russneft (50%) Baitugan (E, P): 100% MOL Matjushkinsky Block (E, P): 100% MOL Surgut-7 Block (E): 100% MOL Kazakhstan Estimated recoverable resource potential*: 50 MMboe Fedorovskoye (E): 27.5% MOL (operating shareholder), 50% EVL, 22.5% FIOC, UOG operator *Working Interest (unrisked) 1 pro-forma 2009: assuming FY INA contribution Surgut-7 Hydrofracturing of Jurassic in Atayskaya-2 well Preparation work of drilling activities in 2012 Matyushkinsky Drilling of 1 exploration well on Verkhne- Laryegan structure ZMB Exploration work program E Baitex Preparation of exploration program Fedorovskoye Finish drilling of Rozh-U-21 appraisal well Drilling of 2 additional appraisal wells Testing of 3 appraisal wells 3D Seismic reprocessing and reinterpretation G&G studies Development work program E Completion of gas power plant construction secures continuing operation Baitex Drilling of 16 wells aiming to increase the production level to 5,200 boepd in 2011 Extension of water injection system, finalizing reconstruction of Central Processing Station, extension of gathering system and power supply system, completion of power generation plant for the utilization of associated gas, extension of capacity towards Transneft pipeline Matjushkinsky Drilling 11 production wells on Ledovoye field in 2011; building surface facilities and infrastructures on Ledovoye and Kvartovoye fields for the treatment of increased production and drilling further production wells in Fedorovskoye Extended well test related studies, detailed engineering work 21

22 PAKISTAN INTENSIVE SIMULTANEOUS ACTIVITY FROM EXPLORATION TO PRODUCTION Outstanding exploration success over the last 11 years Upstream CAPEX share Production outlook (Mboepd) E 2012E 2013E Work program E Exploration Development 2P reserves (2010): 11.9 MMboe Production (2010): 4,700 boepd production Estimated recoverable resource potential* targeted 65 MMboe Estimated peak production**: 20,500 23,000 boepd, reached in 2016 Tal Block (E, A, D) 10% MOL operator in exploration, PPL (30%), OGDCL (30%), POL (25%), GHPL (5%) Concession agreement signed in 1999 Margala and Margala North Block (E) 70% MOL operator, POL (30%) Karak Block (E): 40% MOL, Mari Gas (60%) *Working Interest (unrisked), **Entitlement (unrisked) 1 pro-forma 2009: assuming FY INA contribution Tal Acquisition of additional 279 km 2D seismic Construction of necessary surface facilities and pipeline for EWT of Makori-East-1 well Continuation of early production of Mamikhel- 1 and Maramazai-1 wells and drilling of two appraisal wells and one exploration well Margala and Margala North Drilling of two exploration wells Karak Drilling of one exploration well : Drilling of 3 exploration wells and 3 appraisal wells in case of success Background information Continue production via existing Processing Facilities Drilling of a new production well (Manzalai- 9), implementation of tie-in facilities and additional components related to the Central Processing Facility Award of Engineering, Procurement, Construction and Commissioning (EPCC) contract in order to construct 28,000 boepd gas capacity plant having suitable technology to process Makori gas : Drilling of 2 development wells and 2 production wells 6 significant discoveries since 1999 During the last 11 years MOL has acquired noticeable operation experience, local and technical knowledge, which ensures the security of the operations and the assets The consortium provides 7-8% of gas production of Pakistan MOL supports local communities 22

23 CREATING BALANCED PORTFOLIO ON THE BASIS OF COMPETENCIES Active portfolio management Competency based target setting along our experiences and capabilities More than 70 years experience in Hungary and over 20 years experience in international exploration Commercial reserves explored on previously unsuccessfully drilled areas (Pakistan) In-house, integrated maintenance services Successful partnerships Track record of last 10 years proves our success in portfolio development and exploration providing a strong growth pillar for the future Kurdistan region of Iraq: major discoveries prove our outstanding geological knowledge Kazakhstan, Pakistan: remarkable drilling success on previously unsuccessfully explored areas Matjushkinskiy: exploration and development of significant production base Adriatic offshore: development of sizeable offshore production areas Proven track record in managing large scaled projects from exploration to production: Syria and Pakistan Reputed international in-house drilling services: Crosco Active portfolio management Risk New, exploration focused strategy + inorganic opportunities? Development and exploration as a strong growth pillar STRONG KNOWLEDGE BASE Creating a strong, balanced portfolio by good selection risk diversification and successful operation High Very low Minority share Balanced portfolio Active partnership Operatorship Focus on field development with short-term impact Transforming of existing exploration assets to production in the mid-term Dynamic exploration strategy Most of our existing prospects will be drilled within three years Internationally reputed drilling services We aim to add further elements to the portfolio Exploration is the preferred way in Upstream growth due to high cost of reserve acquisitions Continuous monitoring of inorganic growth opportunities 23

24 DOWNSTREAM Reinforce Regional Stronghold Position 24

25 SOLID BASIS WITH OUTSTANDING ORGANIC GROWTH OPPORTUNITIES Integrated operation in adjacent markets Refining Logistics Marketing MOL Group Capacity: 23.5 Mtpa (470 thbpd) Danube Refinery Capacity: 8.1 Mtpa (161 thbpd) NCI: 10.6 Bratislava Refinery Capacity: 6.1 Mtpa (122 thbpd) NCI: 11.5 Rijeka Refinery Capacity: 4.5 Mtpa (90 thbpd) NCI: 9.1 Mantova Refinery Capacity: 2.6 Mtpa (52 thbpd) NCI: 8.4 Sisak Refinery Capacity: 2.2 Mtpa (44 thbpd) NCI: 6.1 Group refinery yield (2011E) 2% 6% 6% 6% 3% 9% 22% Logistics Network 40 depots in 7 countries 972 km oil and 1840 km product pipeline 2.7 Mcm Crude and Product storage capacity Sales volume increase (Mt) Wholesale 21.6 Mt sales volume 20% regional market share Presence in 12 countries, market leader in 4 countries 27 % end-user sales Petrochemicals 1.4 Mt external sales volume 12 % captive market for Refining Retail Network 1,600+ FS 7 brands in 11 countries 3.5 Mt total fuel sales Avr. throughput: 2.7 Mlpa 16 % captive market for Ref. Capacity (ktpa) TVK SPC Ethylene Polymer Strong asset base operated in adjacent market The key Downstream player of the region with 2 best in class refineries Integration of 5 plus 2 units ensure outstanding synergy potential 46% LPG Mototre Gasoline Fuel oil Other Naphtha Middle Distillates Bitumen Other chemical prds. Region-wide Logistics, Wholesale and Retail network serve the market and provide above 55% end-user share Share from total R&M sales 25

26 OUR STRENGTHS ALONG THE INTEGRATED VALUE CHAIN Key elements of our strong Downstream performance In the refinery Complexity / Configuration High complexity assets higher ratio of valuable products from a bbl of crude more flexible operation Proven track record of asset developments the right investment in the right time + Location Benefit Beyond the refinery gate Strong landlocked position with access to the Mediterranean region CEE region has still good demand growth potential, SEE is the fastest growing European market Operates on adjacent markets Crude cost and delivery Ability to process lower quality and cheaper crudes Selecting the most economic crude slate Efficient pipeline supply with access to opportunity crudes via alternative route Efficient operation, driven by integrated optimization Capturing the whole value chain Apply from crude-to-plastic philosophy End-user focus in wholesale Strong retail presence with growth focus Bilateral advantages of Petchemintegration ensures flexibility Cost reduction programs for optimized OPEX Integrated efficiency improvement programs focus on key cost elements Harmonized procurement with increased purchasing power Continuous joint optimization of 5+2 units increases utilization, flexibility Asset development programs are optimized on the extended group level 26

27 ON TRACK TO BECOME A PREMIUM DOWNSTREAM PLAYER Maximize asset efficiency through 3 pillars Efficiency increase of existing assets Organic growth projects Selective inorganic steps Reinforce Regional Stronghold Position Complexity / Configuration Keep top position of our best assets Elevate Rijeka to the top league Maintain DS flexibility with SPC development Adjust Duna HCK to market environment 4% 6% 4% 2013E 4% Refinery yield 3% 11% 19% Long term target 6% 3% 5% 4% 2% 11% 19% Location Benefit Targeting 24 % regional motor fuel market share supported by Logistics / Wholesale / Retail developments Go for growing markets: move towards South Crude cost and delivery Enjoy low cost crude supply and maintain alternative options Selecting the most economic crude slate (special focus in Croatia) 49% 53% LPG Naphtha Motor Gasoline Middle Distillates Fuel Oil Bitumen Other chemical products Other Capturing the whole value chain Reinforce retail and logistical networks Increase Petchem competitiveness & profitability Compliance with bio-fuel and environmental regulations Efficient operation, driven by integrated optimization Efficiency improvement targeting USD 280 mn EBITDA improvement ambition by 2013 (2009 basis) Step change in joint optimization to increase flexibility Selective inorganic growth targeting assets that fit to the current portfolio (focus on Logistics and Retail) 27

28 LONG TERM TENDENCIES JUSTIFY MOVE TOWARDS COMPEXITY AND DIESEL Favorable demand position in CEE Supply-Demand Balance / 2015 / 2020 (including refinery and bio supply in Mt) North-West Europe *incl. North Africa Other Mediterranean* Gasoline Gasoil CEE- MOL s Core region Tightening product quality regulations penalize heavy products and simple refineries in Mt Dieselization & CEE gasoil shortage continues Economic growth and transportation as main drivers 11 Mt incremental gasoil demand expected in CEE ( ) Even after the planned regional refinery developments and the growing bio-fuel share stable gasoil imbalance expected in CEE Gasoil demand: 2.3% CAGR ( ) Regional imbalance Bio Supply Refinery supply EURO V Motor Fuel Specifications in SEE as well Tightening marine fuel specification is expected in the Mediterranean as well Environmental regulations force power plants to switch to alternative fuels from fuel oil Complexity is still crucial and diesel oriented projects are supported both from global (crack spread) and local (market) point of view in CEE Room for further projects both in the medium-term (Rijeka Phase 2) and on a strategic horizon (Duna Hydrocracker) 28 Source: Woodmac and MOL estimates.

29 RIJEKA PHASE-1 COMBINE COMPLIANCE & FLEXIBILITY The first step towards an efficient, profitable Croatian Downstream Full 10 ppm diesel and gasoline production while reducing environmental footprint Product yields basis and after Phase 1 Key focus was compliance with environmental regulations Full impact on 2011 operations 10% 0% 6% 2% 18% 1% 0% 6% 4% Mild HCK complex (2.6 Mtpa) increase NCI to % 28% 29% Environmental compliance in line with EU directives Grass-root Sulfur Recovery Unit reduces SO2 emission Improved yields and refinery utilization Increase white product yield to 75% Middle distillates yield improves to match demand growth Sales of EU conform grades drives refinery utilisation (from 65 to 75%) 33% E 42% LPG Naphtha Motor Gasoline Middle Distillates Fuel Oil Bitumen Other chemical products Other Wider market for Rijeka ensures higher utilization Pace-setting regional position Quality leader in SEE markets pole position for regional market consolidation EU conform grades enable access to EU markets Replace cca. 500 kt off-spec product bulk sales with more profitable regional distribution cca. 2 USD/bbl gross margin improvement of Rijeka refinery exp. in addition to compliance New EU export markets opportunities 75% 65% E Rijeka refinery throughput in Mt Crude destillation utilization in % 29

30 RIJEKA PHASE-2 ENTERING THE TOP LEAGUE Upgrade almost 1 Mt heavy residue to marketable white products with robust investment economics Supportive Market Environment Shrinking heavy fuel oil markets due to tighter product specifications Gradual improvement of diesel spread and increasing light-heavy differentials Increasing regional demand imbalance favours diesel growth Residue Upgrade Improves Product Yield Delayed Coker (1 Mtpa) technology with strong in-house references Implementation time of 3-4 years from FID influenced by local permitting procedures CAPEX estimated at cca. USD 450M level Additional 0.6 Mt high quality diesel production Product yields current and after Phase 2 6% 18% 1% 6% 0% 5% 4% 2% 12% 42% 29% 54% LPG Naphtha Motor Gasoline Middle Distillates Fuel Oil Bitumen Other chemical products Other Schematic flow chart of Rijeka refinery after Phase 2 21% Environmental compliance continued Addition to existing Sulfur Recovery Unit to maintain EU level SO2 emission Refinery Flexibility and Profitability set to strengthen Higher complexity (NCI 10+) residue destruction to match market demand slate 3-4 USD/bbl gross margin improvement exp. 30

31 PETROCHEMICALS DEVELOPMENT TO ENSURE FLEXIBILITY Maintain synergies from Refining Petrochemicals integration Competitive advantages Operational among the Top 10 EU players in polyolefin fully integrated with MOL s feedstock supply efficient asset base, up-to-date product portfolio Commercial outstanding location to exploit growth potential of CEE markets (60% of total sales) diversified sales among industries limits volatility Exploiting synergies of integration Petchem supports Downstream growth by providing a captive market for excess gasoline (naphtha) Improve flexibility of Downstream Valuable by-products from Petchem (0.6 Mtpa) Smooth feedstock supply from Refining (2.3 Mtpa) Operate in down cycles as well stability is valued by markets Active optimization of feedstock transfer among units Refining (naphtha, LPG, gasoil) Raw mat. Olefins (ethylene, propylene) Polymers (LDPE, HDPE, PP) SPC asset modernization Increase SPC profitability Maintain Group refining flexibility Ensure MOL Group s position on polyethylene market Higher prices for better quality LDPE 31

32 EFFICIENCY PROGRAMS FOCUSING ON KEY COST ELEMENTS Significant improvement is targeted at each portfolio element Cost 49% COST/REV. COST/REV. Overall efficiency improvement of Croatian Downstream Revenue 51% Project elements targeted cost & revenue optimization through the whole value chain by target delivered : USD 100 mn Refining: Maintenance optimization Cheaper water supply Commercial: Sales channel and export optimization Supply Chain Management: Yield improvement through crude slate Retail: maintenance and opening hours optimization Key steps ahead for Refining: Reduce energy consumption Loss reduction Logistics: depot optimization Retail: network segmentation and cost control + Maintain leading position and competitiveness of our Hungarian/Slovakian/Italian assets Challenge: rising own consumption and purchased energy cost, driven by higher oil prices affect harder the complex refineries Integrated efficiency improvement programs launched (1) Energy Management Program to decrease volume and price of the used energy and implement energy optimization. (2) Maintenance: improving mechanical availability and increase maintenance cost efficiency. Aiming to be in the top quartile in Solomon Study for complex assets, while elevate other sites as well. (3) Bottom-up idea generation program (EIFFEL): utilize employee s ideas and creativity in increasing operational efficiency (already evaluated ideas) (4) Improved inventory management USD 160 mn - Croatia USD 120 mn - Other parts of the Group : targeted USD 280 mn EBITDA improvement 32

33 SALES INCREASE ABOVE MARKET GROWTH Capturing location benefit supported by Logistics and Commercial developments Gradual improvement of regional motor fuel demand CEE motor fuel market demand CAGR Demand increase is expected to continue in line with recovery of economies 4.1 Mt incremental diesel demand in CEE in the next 3 years Regional average Gasoline +0.8 Diesel Focus on principal extensive growth areas Optimized sales to the most valuable domestic and core markets Hold fast : maintain market share in HUN, ITA, while increase in SK, regain in CRO and BIH Go for it : further growth on key export markets AUT, CZ, expansion in West-ROM, SRB, SLO Keep up : maintain and build up market presence on markets ensuring optimum flexibility to refining assets Further development of Logistics, Commercial and Retail to support sales Increase total sold volume (by 7%) to 23.1 Mt Development and more efficient logistics network (repeat success of AUT in SEE) supports sales volume Retail expansion and fuel card market share growth Opportunistic add-on marketing deals countries with own refineries and/or higher than 50% market share market share between 5% and 50% market share below 5% +3.7 Diversified but strong on domestic markets R&M sales volume (Mt) Motor fuel sales by region Increase regional market share: to 24% from 20% in the medium term E 2012E 2013E HUN CRO CEE other SK ITA Ex-region 33

34 RETAIL EFFICIENCY IMPROVEMENT SUPPORTS INCREASED REFINERY SALES Capturing regional growth opportunities by differentiated geographic focus CEE market is still increasing, while SEE has significant growth potential in Passenger car penetration Fuel consumption / capita Keep leader position in domestic countries Increasing retail presence on growth markets with greenfield investments and/or opportunistic network acquisitions Optimize operation considering market share and seek for attractive business opportunities Create an efficiently manageable network Focusing on Growth markets Market strategies Maintain strong position by enhanced costumer value proposition Evaluate optimal investment strategy on a site-by-site basis in order to Increase overall network efficiency Focus on filling stations with outstanding locations Dispose inefficient sites Select the optimal operating model Enhance customer value proposition answering to local markets Improve brand perception with refreshment of filling station design Country specific tailor made strategies Increase fuel sales volume: from 4.4 bn ltr (2010) to 4.8 bn ltr (by 2013) Increase network efficiency: average throughput per site from 2.7 Mlpa (2010) to 3.0 Mlpa (by 2013) Strengthen efficiency by systematic network improvement Increase market share by exploiting organic and inorganic growth opportunities Improve non fuel sales Market share (2010): X > 30% 30 % > X > 10 % 10 % > X 34

35 CAPTURE FIRST SYNERGIES BETWEEN R&M/G&P WITH REVAMP OF TPP Value chain integration with Power business could provide further synergies Ongoing project ( ) is the revamp of the Thermal Power Plant Synergies between refining and electricity generating activities SLOVNAFT refinery Electricity Steam HFO: ~ 500 kt TPP CAPEX:150 mn EUR Planned capacities: 174 MW Operation in semi-peak mode Thermal Power Plant Electricity Cheaper dual-fuel capability Possible benefit from linked gas & electricity trading Further enhance refinery complexity, joint optimization with PP Synergies between refining and power generation CAPEX saving from refinery site location Steam market for co-generation Savings on electricity grid charges The first step is the revamp of Slovnaft TPP TTP will be the primary source of steam and electricity for the refinery and will burn all of the HFO output of Slovnaft, increasing further the complexity of the refinery Further investments adjusted to external environment CCGT power production is the answer to supply flexibility required by volatile market demand and enhance power supply security of MOL Partnership with CEZ CEZ as pure electricity generating and trading company with substantial future gas consumption is a reputed partner 35

36 MOL is committed to Sustainable Development SUSTAINABILITY IS A TOP PRIORITY IN MOL GROUP The only CEE company in Dow Jones Sustainability Index Represented on the highest level (Sustainable Development Committee of the Board of Directors) Each business and functional units are involved MOL Group SD focus areas Climate Change Health & Safety Human Capital Environment Communities Economic sustainability Perception from the Capital Market MOL Group has been included into Dow Jones Sustainability World Index as the first and sole company from the region based on the evaluation of the leading company specialised for global corporate sustainability analysis, namely the Sustainable Asset Management (SAM from Switzerland). The 2500 largest global companies (selected from Dow Jones Global Stock Market Index) are evaluated, then the top 10% is selected as the best sustainability performers. In oil companies were involved into the evaluation process, and MOL Group was recognised as one of the best

37 DISCLAIMER "This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capital expenditure, cash flows, costs, savings, debt, demand, depreciation, disposals, dividends, earnings, efficiency, gearing, growth, improvements, investments, margins, performance, prices, production, productivity, profits, reserves, returns, sales, share buy backs, special and exceptional items, strategy, synergies, tax rates, trends, value, volumes, and the effects of MOL merger and acquisition activities. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to developments in government regulations, foreign exchange rates, crude oil and gas prices, crack spreads, political stability, economic growth and the completion of ongoing transactions. Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, you are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which speak only as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable securities laws. Statements and data contained in this presentation and the associated slides and discussions, which relate to the performance of MOL in this and future years, represent plans, targets or projections." 37