Position of the Mineral Oil Industry to Ethanol

Transcription

1 OMV Aktiengesellschaft Position of the Mineral Oil Industry to Ethanol 2. European Bioethanol Technology Meeting Detmold, April 25-26, 2006 Dr. Dipl.-Ing. Walter Böhme Head of Innovation OMV AG Move & more

2 Business Units of OMV AG Exploration and Production Refining and Marketing incl. Petrochemistry Gas 2 OMV AG, Position to Ethanol

3 Exploration & Production - Worldwide Activities 350,000 boe/d Stable production volumes from Austria and Romania Significant growth in North Africa, Middle East/Caspian and in the North Sea/ Atlantic Margin Key Core Area Valuable contribution from New Zealand Core country Potential Core Area Substantial position in Russia Potential core country 3 OMV AG, Position to Ethanol

4 R&M: A Leading Market Position in CEE Oil products market in mn t in % total market share OMV Group (retail and commercial) 50.0 mn t 20% market share within the D-13 area leads to a dominant position for Bayernoil Burghausen Schwechat Optimizing the refining system Operating above a critical mass in retail 15.4 mn t Retail Network 2500 stations 15.9 mn t Petrobrazi Arpechim Entering new markets improves the portfolio life cycle (mature to growing) 34 % of Petrol Ofisi Source: RM TM1 04/ OMV AG, Position to Ethanol

5 Gas Vision and strategy 2010 Dynamic growth in Sales and Trading (EconGas, Petrom), Transit (Austria, Nabucco, LNG) and Storage (Austria, Romania)? (South) Germany (North) Italy TA G CZ WAG SLO HR BA SK H YU RO BG? Nabucco 2011? Iran Sales and Trading: Core markets EconGas sales cluster Petrom/OMV Gas sales cluster? North Africa Gaslogistcs: Expansion of transit capacity of TAG and WAG Promote Nabucco project Potential integration projects with OMV/Petrom E&P Existing storage facilities Potential storage facilities Potential LNG plant 5 OMV AG, Position to Ethanol

6 Detmolder Ridge in the Austrian Alps 6 OMV AG, Position to Ethanol

7 Market Environment 7 OMV AG, Position to Ethanol

8 Europe oil product balances Mt Surplus Gasoline Exports: 42% of the production in 2015 Deficit LPG Gasoline Jet/Kero Diesel % of production 2015 Source: Wood Mackenzie 8 OMV AG, Position to Ethanol

9 Gasoline wordwide flows at 2015 [Mton] Source: ENI R&M at 7th Annual European Fuels Conference, Paris OMV AG, Position to Ethanol

10 Fuel sales volume in Germany 35 million tons Diesel Gasoline Forecast Source: MWV aktuell, Special Edition Biofuels, Feb 28, OMV AG, Position to Ethanol

11 Share of Diesel Cars increase Share of Diesel fuelled new passenger car registrations [%] Source: Fuels Conference, 01Lawrence_Eagles_IEA.pdf, Session 1, chart OMV AG, Position to Ethanol

12 Reasons for shift to diesel fuel Good performance of diesel engines Low cost of operation Low fuel consumption Lower mineral oil taxes on diesel oil Delta MOT [ ] AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK 12 OMV AG, Position to Ethanol

13 Trend of mineral oil tax in Germany Gasoline Diesel Tax [ cent/ l] Source: MWV aktuell, Special Edition Biofuels, Feb 28,2006, internal view 13 OMV AG, Position to Ethanol

14 Product Price: Platts Barges Fob Rotterdam 600 [ / 1000 l] Gasoil Gasoline OMV AG, Position to Ethanol

15 Resume Market Environment EU Diesel shortage will increase EU Gasoline oversupply will increase Challenge Balance the demand - Mineral Oil Taxes - Car Taxes - Car Emission Regulations - etc. 15 OMV AG, Position to Ethanol

16 Ethanol for the Fuel Market 16 OMV AG, Position to Ethanol

17 Production costs of bioethanol Gross (w/ o subsidy) Net (w subsidy) [ / 100 l] Brasil (sugarcane) USA (corn) EU (wheat, S) EU (wheat, L) Source: Study by IEE, Nachhaltige Biomassenutzungsstrategien im europäischen Kontext 17 OMV AG, Position to Ethanol

18 Basic conditions for Ethanol market launch Technically Used in the vehicles without modifications Existing product standards (warranty) Products can be blended (supply chain) Use of existing transport logistics and dispensers Economically Interest for all stakeholders Self financing for the oil company? Customers needs? 18 OMV AG, Position to Ethanol

19 Way s to introduce Ethanol Today according to the fuel standard EN 228 Ethanol blended up to 5% (v/v) in gasoline (= 3,4% energy) ETBE blended up to 15% (v/v) in gasoline (= 6,2 % energy) Oxygen content max. 2,7 % (m/m) Tomorrow Ethanol blended > 5% (v/v) in gasoline? Ethanol (E85) for flexible fuel vehicles? Neat FAEE and FAEE blends in diesel oil? Ethanol and ethanol derivative in diesel fuel? Neat ethanol fuel (E95 with additives for diesel engines)? 19 OMV AG, Position to Ethanol

20 Question for refineries: Reduce output volumes Ethanol Blend = Substitution 5 % (v/v) ethanol substitute min. 3,4 % (energy) gasoline Ethanol Derivate = Change ETBE substitutes MTBE 20 OMV AG, Position to Ethanol

21 More barriers for Ethanol direct blending Vapor pressure Influence on emissions and driveability Ethanol and ethanol-blends increase vapor pressure, need for dedicated logistic supply chain Presence of water Water elutes ethanol Water absorption of gasoline Clouding of the product Resistance of materials Corrosion (new vehicles-old vehicles) New, ethanol/water resistant materials have to be used in the fuel system of the vehicles as well as in the distribution system. Highly integrated and fungible (exchangeability) nature of the transport fuel market OMV Biofuels Österreich praktische Umsetzung_en, ch OMV AG, Position to Ethanol

22 Ethanol direct blending impact Refinery production Reduction of gasoline output = reduction of utilization Availability of low RVP components Supply Pipeline transport not possible if the system also deliver aviation fuel Storages Fixed roofs, more delivery systems (export, product portfolio) Retail Station Water 22 OMV AG, Position to Ethanol

23 Ethanol implementation in Austria Mineral oil tax [ /1000l] *) **) until * ) S-free * * ) S-free + min. 4,4% (v/v) Bioethanol OMV Biofuels Österreich praktische Umsetzung_en, ch OMV AG, Position to Ethanol

24 Advantage of tax differentiation Defined products on the market with or without biofuels, easy to monitor About the amount of the tax differential the authorities can control the amount of biofuels on the market The system is independent from crude oil prices Same system for Biodiesel in Austria since Result = 100% of diesel on the market contain 4,8% of Biodiesel. 24 OMV AG, Position to Ethanol

25 Detmolder Ridge How to conquer it? ETBE Very casually to deal with it Ethanol direct blend esp. in summer Tiring and inconvenient 25 OMV AG, Position to Ethanol

26 Summary: Position on Biofuels In the energy sector biomass should be used where its offer the best energy efficiency and the greatest GHG avoidance (should be considered by legislation and tax treatment) Costs of today s biofuels (in the transport sector) exceed significantly those of the conventional fuels they are respected to replace Harmonization of biofuels implementation mechanisms between Member States is desirable Introduction of biofuels must not compromise fuel product quality Regulatory mechanisms must not discriminate between biofuels and biofuels blends on the basis of their origin (feed, country) Flexible Mechanism that use market forces to encourage competition will deliver the best efficiency Substitution targets should be framed over total road transport fuel volumes and should consider markets needs. 26 OMV AG, Position to Ethanol

27 But The implementation of biofuels now is a political decision Until the costs of biofuels exceed significantly those of the conventional fuels the authorities can promote and control the implementation about tax treatments. According to the Commission s own assessment EU biofuels would become cost-competitive with sustained oil prices above ca. 110 $/bbl for bio-ethanol With shrinking of the gasoline demand in the EU also the need and potential for substitution of gasoline is shrinking. 27 OMV AG, Position to Ethanol

28 Thank you Any distillation residue? 28 OMV AG, Position to Ethanol