Good afternoon, ladies and gentlemen, and a warm welcome to our 2024 Capital Markets Day. Before we start, let me draw your attention to the cautionary note regarding forward-looking statements at the beginning of this presentation. Today, the executive board team will update you on the strong progress OMV Petrom has made in its transformation journey since the launch of the Strategy 2030 in December 2021. Since then, we have seen unprecedented changes in the market environment. We are pleased with the resilience shown by our business through this period, which has demonstrated that the strategy we set out back in 2021 was and remains the right one.
We are also excited to share our more ambitious targets with regards to some of our low and zero carbon projects, and the stronger commitment to our shareholders in terms of dividend distribution. I am very pleased to be able today to introduce Martin Urquhart, Vice President for the Neptun Deep project, who will give you an update on our flagship project during our presentation today. Let me start by reminding you of our strategic ambition for 2030, namely, to lead the energy transition in Southeast Europe, capitalizing the opportunities we see in emerging markets.
Our goal is to transform the company for a lower carbon future, while also securing the energy needed for today. We aim to support the region's sustainable long-term economic growth, while generating healthy cash margins that, in turn, will facilitate new investments and attractive shareholder returns. Our three key complementary pillars remain unchanged. First, transition to low and zero carbon. We are developing new low-emission products to generate value for our business and to respond to our customers' needs.
In terms of operations, our target is to become carbon neutral by 2050. Second, grow regional gas. Natural gas is a key asset with an essential role in the energy transition due to its lower carbon emissions. Our growth in gas is mainly driven by Neptun Deep in the Black Sea, a crucial project for the energy security of Romania and the region. Third, optimize our traditional business. We are transforming our existing assets, which are essential to supporting the current energy demand. We focus on value over volume and operational excellence while maximizing our margins through our integrated business model. We launched our strategy during the COVID pandemic.
Three months later, at the end of February 2022, the military conflict in Ukraine began, and since then, the geopolitical tensions have continued with renewed conflict in the Middle East. These events have significantly impacted energy market priorities and market dynamics, bringing energy security and affordability to the fore. As you know, we have seen unprecedented volatility in prices, inflation, and increased regulatory interventions as a result. Despite all of these challenges, we are successfully delivering on our strategy. Let me quickly update you through our achievements in each of the strategic pillars. Starting with the traditional business.
In exploration production, we executed our drilling and workover plan. We announced the discovery of new crude oil and natural gas resources in Romania, with recoverable resources of over 30 million barrels of oil equivalent. This is a result of our exploration strategy focused on near-field opportunities located close to existing infrastructure. In refining and marketing, we continue to prepare our refinery for the future. In 2023, we executed the planned turnaround after a running period of 5 years. We finalized the coke drums replacement and invested in the new aromatics complex.
In our partnership with Auchan, we finalized ahead of plan the rollout of proximity stores in almost 400 Petrom-branded filling stations. In gas and power, the past two years marked a record high number of customers and a net electrical output. Constrained by the local regulatory pressure and in search of higher returns, we have consolidated our position in the local market by developing new products and expanding in the region. In 2023, we also successfully performed a significant planned shutdown of the Brazi power plant. In our second pillar, grow regional gas, we have made decisive steps regarding Neptun Deep.
Last year, we took the final investment decision, and all major contracts have been awarded. Martin will talk more on this later. We are also proud of our progress in the third pillar, transition to low and zero carbon. In renewable power, the transactions announced during the past two years with CE Oltenia, Jantzen Renewables, and Renovatio add up to a portfolio of solar and wind power of more than 2 gigawatts, including partnerships. Last week, we took the final investment decision for a new SAF HVO plant in our Petrobrazi refinery, thus becoming the first major producer of renewable fuels in the region by 2028.
Leveraging the EU non-reimbursable funds available through the National Recovery and Resilience Plan, we have also accelerated our green hydrogen projects in Petrobrazi, planned for the second half of this decade. On alternative mobility, after closing the acquisition of the Renovatio network last month, we are well on track to reach around 1,000 fast and ultra-fast charging points by the end of this year, positioning OMV Petrom as the largest player in e-mobility in Romania. We have already secured EU financing for part of our projects and turn to access further EU funds whenever possible.
Our ability to generate solid cash flow has provided the foundation for increasing the base dividend by 10% and distributing a special dividend each year since 2021. In 2023, we paid a record high dividend with a competitive yield of almost 20%, which, combined with the share price appreciation, resulted in a total shareholder return of over 50% in 2023. On GHG emissions, we reduced our Scope 1 and 2 emissions by 22% in 2023, compared to 2019 baseline. At the same time, our Scope 1 to Scope 3 emissions fell by almost 10% in 2023, also compared to 2019.
Our proposition to shareholders remains unchanged, increase profitability and grow dividends while securing a sustainable long-term business. We are developing our integrated business model and expanding our gas business with Neptun Deep. Our target to enhance profitability to more than EUR 1.5 billion of Clean CCS EBIT in 2030, will allow us to continue to increase base dividends by 5% to 10% per annum over the decade, while maintaining the special dividends optionality. The long-term sustainability of the company through the energy transition, remains the center of our actions.
To help achieve this, we are investing EUR 3.7 billion into low and zero carbon businesses, unchanged since our strategy announcement in 2021. Of the EUR 3.7 billion, more than EUR 1 billion will go into innovative and high potential technologies. All our strategic projects support our company's and Romania's decarbonization agenda, as well as our ambition to reach carbon neutral operations by 2050. Natural gas is expected to play a pivotal role as a transition fuel in the power mix in Romania, with CO₂ emissions almost 60% lower than coal in power generation.
In addition to this, the flexibility of gas-fired power plants supports the integration of renewable capacities into the power system. Neptun Deep, a EUR 4 billion project, is the largest gas development in the European Union and will also help to reduce emissions intensity in E&P. We are investing around EUR 1 billion to develop the largest solar and wind power portfolio in Romania. We are also investing a further EUR 1 billion in the decarbonization of Romanian transportation through biofuels production and the largest electric charging network. Our GHG reduction targets remain unchanged for 2030.
Fundamental to these are carbon capture and storage, especially for hard-to-abate industries. Our background in oil and gas provides us with the technical expertise to develop CO₂ storage projects, and we will go into this in more details later. Turning to the market context that underpins our strategy, Romania's fast-growing economy is a key driver of energy demand, and we have already started to capture this opportunity. According to the IMF, Romanian GDP is forecast to grow at an average annual rate of more than 4% to 2030, well above the region and the EU average.
Higher GDP growth leads to increased energy demand. Looking at power demand in Romania, we forecast steady growth until 2030, supported by increasing electrification and mobility. For our products, especially with low emissions, growth will continue to 2040. After 2030, we expect demand for gasoline and diesel to begin to drop, following the demand trend seen in developed countries. On the other hand, jet fuel consumption will see continued growth to 2040, with substituting jet fuel being the main challenge the transportation sector faces.
Post-2030, domestic natural gas consumption is forecast to reduce as lower operating results for gas-fired power plants are forecast, while the share of renewable sources in the electricity mix increases. However, natural gas will continue to play a key role in the Romanian energy system through 2040, with increasing demand for hydrogen production and as a balancing source for renewables. With our investments in low and zero carbon businesses, we are also well-positioned to capture rising demand for renewable power, alternative mobility, and biofuels.
Moving to our strategic pillar, optimize traditional business. Our core business will continue to be highly cash generative, funding investment in regional gas growth and low and zero carbon projects, as well as dividend distributions. Let me provide some details for each of our three business divisions. First, in exploration production, where we are constantly working to mitigate the natural decline rate of over 10% per year, our objectives are to maximize the economic recovery of our mature fields and contain costs. In order to maximize the potential of our current integrated E&P assets, we plan to drill around 50 new wells and perform more than 400 workover jobs each year on average.
Until the end of the decade, our E&P business, excluding Neptun Deep, will see annual investment of up to EUR 400 million on average, with IRRs well above our 12% threshold. In the context of high natural decline, since 2021, we have held it to around 6% and expect to further lower it to below 5% by 2030, excluding Neptun Deep production. Our portfolio, excluding Neptun Deep volumes, has a break-even price of around $30 per barrel of oil equivalent by 2030, at which is expected to remain operating cash flow positive, which proves the resilience of our traditional portfolio.
To manage costs, we will continue our optimization programs, reduce our footprint, and assess selective field divestment opportunities. We are also improving our contractor management and workover strategy in order to drive efficiency improvements. Moreover, we continue to increase automation and to modernize our facilities. Lowering methane intensity in exploration production is a priority for us. We have reduced it by over 70% versus 2019, and we are targeting a reduction in methane intensity to below 0.2% by 2030. We will continue to optimize our traditional production and high-grade our portfolio.
By 2030, we plan to increase our hydrocarbon production by more than 40% versus 2023, with gas accounting for about 70%, supported by Neptun Deep volumes. Given lower production and higher costs, our unit production cost will stay close to the current level of around $16 per barrel in the midterm and will significantly decrease when Neptun Deep comes on stream. Our operating cash flow in $ per barrel of oil equivalent is also expected to slightly increase by 2030, reflecting supportive commodity prices and strict cost management.
Moving to refining and marketing, our Petrobrazi refinery has just celebrated 90 years of operations this week. Through post-privatization investment of over EUR 2 billion, we have ensured that it operates reliably and safely at very high utilization rates, while also gradually shifting towards higher value products. The refinery has been well positioned to capture the increasing demand for fuels and high refining margins in recent years. While margins are expected to gradually return to their normalized level, we continue to see good prospects for fuel demand, and Petrobrazi will be instrumental in capitalizing on them. Until 2030, we expect an average refining utilization rate greater than 95%.
In 2027, we plan the next major turnaround, thus the utilization rate will be around 85% in that year. Annual average investment for the traditional refining business will be around EUR 150 million. The integration with our E&P business will remain strong throughout the decade, supported by our equity production. We will further maximize value through integration efficiency, shifting production towards higher value products, and preparing for a sustainable refining business. We will diversify our non-fuel products portfolio through a bottom-of-the-barrel upgrade project in the second part of the decade, while expanding our petrochemicals value chain via the increased aromatics capacity.
All these projects will contribute to achieving our carbon intensity reduction target for the refinery of more than 15% by 2030, compared to the 2019 baseline. In retail, our long-term ambition is to remain our customers' first choice in Romania, while consolidating our position in the other operating markets. As a leading provider of products and services for mobility in the region, we aim to drive value through partnership and increase customer loyalty. We will continue to leverage our dual brand strategy, Petrom and OMV, as our main competitive advantage. Digitalization is a crucial factor in our daily lives.
In this area, our MyStation app has more than 500,000 active customers accessing tailored promotions and benefits. We have also successfully launched the Car Home platform, a personal assistant for drivers offering car-related service management. For the Petrom brand, we benefit from partnerships in the non-fuel sector, such as the one with Auchan. In the premium segment, the OMV brand aims to maintain its position as top quality leader with a MaxxMotion highest performance fuels. This is complemented by the Viva World, where customers can find their favorite Viva coffee cup, freshly prepared food, and drinks on the go, and a diverse portfolio of products and services.
All of these are expected to support further increase in our non-fuel business margins. Together with the rise of throughput for filling station, this would lead to an increase of 20% in profitability per filling station by 2030. In gas and power, we are consolidating our position as the leading integrated gas and power supplier in Romania, while enlarging our regional gas and power presence. To do this, we are growing beyond our equity gas by further extending origination and trading, and enhancing our customer portfolio to capture increased gas demand over the rest of the decade.
Together with Neptun Deep gas, we will have total gas sales of approximately 60 terawatt hours by 2030. In the power business, the Brazi power plant will play a key role in OMV Petrom's and Romania's transition to green power, given its high flexibility and synergies with our renewable power portfolio. By integrating the Brazi power plant with our renewable portfolio and storage capacities, we will be able to better respond to our customers' needs. In both the gas and power businesses, we will continue to develop operations in the neighboring countries and have ensured expertise and access to relevant markets and trading platforms, enabling cross-market optimization.
In addition, we aim to build a strong B2B customer portfolio. Our investments in renewable power will lead to green power sales, making up for around 30% of total power sales by the end of the decade, thus contributing to our ambition to reduce our carbon intensity and support our customers' transition to cleaner energy. Now, let's take a look at the second pillar of our strategy: grow regional gas. OMV Petrom has more than 40 years of experience in operating the Black Sea. Our knowledge of this basin can help unlock potential for further growth beyond Romania and position OMV Petrom as a partner of choice in the Black Sea region.
The Black Sea is a huge opportunity for us, with Neptun Deep at the heart of this strategic pillar. This project, for which we took the final investment decision a year ago, is fundamental to securing our sustainable long-term growth and generating high cash flows that, in turn, will facilitate new investments and attractive shareholder returns. At the same time, by increasing the share of natural gas in our hydrocarbon production, the Neptun Deep project is supporting the decarbonization, as we see natural gas as a key enabler for a successful energy transition. In addition, we are also working on Han Asparuh in Bulgaria, another deepwater offshore opportunity in the exploration phase, located next to the Neptun Deep block.
At the end of 2023, we became the operator of the block, and we are pursuing exploration activity in the license. Now, please let me invite Martin to provide you with more insights on the status of the Neptun Deep project.
Thank you, Christina, and good afternoon, ladies and gentlemen. My name is Martin Urquhart, and I'm the Vice President for the Neptun Deep project. I've been in the oil and gas industry for 35 years and worked internationally on a number of highly complex mega projects. I'm pleased to share that for this flagship project, we have gathered a highly capable international team with extensive experience in delivering deepwater projects globally. The core team of around 150 people is well-established and will grow to around 300 as execution activities ramp up.... We're collaborating closely with our tier one contractors, working on the different elements of the project, drilling the wells, and the engineering, construction, and installation of the Neptun Deep facilities.
Our priority as a project team is to execute it safely, on time, on budget, and at the right quality. We are celebrating almost one year since we took the final investment decision, and I can confirm that we are on track to safely deliver first gas in 2027, within the announced budget of up to EUR 4 billion. We have achieved great progress, and some highlights for me include: the awarding of all major execution contracts. Indeed, over 90% of the execution budget is now committed. Engineering is on track. We have first cut steel on the platform topsides in Indonesia, and plan the same for the jacket later this year.
The Transocean Barents rig is currently in Spain, being configured for the mobilization passage under the Bosphorus Bridge, and all key service contractors are preparing for spudding our first well in 2025. Let me briefly remind you of some of the technical details of the development concept. The project includes the development of two biogenic dry natural gas fields. Domino, the larger field, is located in a water depth of approximately 1,000 meters, whilst Pelican South is shallower, located at approximately 120 meters. The fields will be produced in parallel, both being connected to the shallow water platform.
Domino is expected to produce from 6 wells via 2 production systems, Pelican South from 4 wells via 1 subsea production system. These systems are connected via a combination of rigid and flexible pipelines and umbilicals to the shallow water platform. The pipeline from Domino is continuously direct, electrically heated, a reasonably novel technology in industry, ensuring flow assurance, reliability, and high production system availability. The unmanned shallow water platform is where gas processing will take place. The process is simple, namely dehydration to delivery specification.
The platform will generate its own power and will operate at the highest safety and environmental standards. The entire infrastructure will be operated remotely onshore through Digital Neptune, comprising various digital twins. This allows a constant monitoring control of the processes that optimize production, energy efficiency, emissions, and help deliver the low production cost of around $3 per BOE. Once dehydrated to sales gas specification, the gas is transported via a 160-kilometer pipeline to shore, where it will pass under the near shore via a micro tunnel to the natural gas metering station at Tuzla, and then enter the National Gas Transmission network.
At plateau production, the carbon footprint of Neptun Deep operations is expected to be around 2.2 kg of CO₂ per BOE, almost 8 times lower than industry average. Depletion drive, using the natural pressure of the reservoir to transport the gas to shore, eliminates the need for gas compression. The natural gas discovered is a very high purity, dry biogenic gas with a composition of 99.5% methane, and therefore needs very little processing. Neptun Deep will contribute to approximately half of our more than 70% reduction in target in Scope 1 and 2 carbon intensity in E&P by 2030.
The execution plan of this project takes into account impacts on the environment and local communities. As part of the development, we conducted a full environmental impact assessment, including detailed studies on the environment, health, climate change, and biodiversity. With the mitigations proposed by the project, the EIA and appropriate assessment concluded that the Neptun Deep project does not induce any significant impact on environmental factors and the socioeconomic environment. As I said earlier, Neptun Deep is on track to deliver first gas in 2027, and let me briefly highlight some of the key milestones of the project.
From 2008 to 2015, the highly successful exploration and appraisal campaign on Domino and Pelican, which included 3D seismic acquisition campaigns, drilling of 8 wells, delivered the positive data necessary to declare a joint development commercial. In August 2022, OMV Petrom became the operator, and in June last year, we took the final investment decision with approval for the field development plan by the regulator, received in August. Up until FID, the total gross investment for the project was around EUR 1.5 billion, of which 50% was our share. We have covered our project achievements to date earlier.
The next steps are outlined in this slide and are: the continued delivery of the permitting plan following the regulatory processes and aligned to our execution strategy, the first cut steel for the platform jacket in Italy in the third quarter of this year, commencement of the construction works on the natural gas metering station in Tuzla in the fourth quarter, rig mobilization for the start of drilling next year, the continuation of platform topsides fabrication in Indonesia for completion in 2026, and the installation of platform, pipeline, and subsea infrastructure in the Black Sea through 2025 and 2026.
Of course, finally, the hookup and commissioning activities leading to first gas as planned in 2027. We have exciting times ahead, and I'm committed to deliver this project safely, on time, and on budget. Ladies and gentlemen, before handing you back to Christina, I'd invite you to watch a movie from the first steel cut ceremony for the platform topsides, which took place in May in Indonesia.
Well, we're here today at Saipem's facility, Indonesia, to celebrate the first steel cutting ceremony, and it's an exciting and significant milestone for the project. The project here is for fabrication of the topside of the Neptun Deep projects. It is one of the most important project in the Black Sea in the last few years. ... The first steel cut ceremony is, is for me, significant because it sees the rising of the development from paper and the digital world into reality. So we're cutting steel, and we'll start to fabricate, and we'll be able to see what Neptun looks like.
We'll be able to touch it and feel it, rather than just see it and imagine it in a digital environment. Our promise would see Romania become the largest gas producer in the EU. It would see Romania have energy independence for the near to medium term. So today is significant because we're on track, and a lot of things are built around this project being on time, safely delivered. It's making sure that we work together with the yard. Teamwork is very, very important, and only by working together and discussing challenges, coming up with solutions that will ensure that we load out this project in a safe manner.
Energy levels are high. A new location, an excellent partner in Saipem. Saipem have a fantastic track record at the facility. We hope to become part of the culture that's here, contribute to that, and collaborate 100%. The next 3 years will be an enormous challenge, integrating elements of the project from all over the world. We are truly a global project. It's a fantastic opportunity for everyone involved in Neptun to watch it grow and become a reality.
Thank you, Martin. Let me continue with the third pillar in our 2030 strategy, the low and zero carbon projects. I will start with renewable power, where we are increasing and accelerating our growth plans. We now target around 2.5 gigawatts of solar and wind capacity to be installed by 2030, doubling our previous target of more than 1 gigawatt, both including partnerships. This is expected to translate into 4.7 TWh yearly net electrical output to be obtained in partnership, of which 2.4 TWh is net to OMV Petrom. Our portfolio is built from a mix of M&A and organic projects, taking advantage of Romania's high solar and wind potential and wherever possible, EU funds.
Our entry in the early stages of these large-scale projects is expected to generate double-digit internal rates of return. Building this position in renewable power provides us with certain portfolio advantage that we can benefit from, in particular, integration with our Brazi power plant and green hydrogen production. We are also looking into new technologies, such as power storage, with focus on batteries and hydro pump storage, and we will assess the asset rotation optionality of our portfolio. Another segment where we plan to have a significant contribution is the decarbonization of transportation.
In this respect, we are preparing our refinery for the increased renewable fuels demand in the region. In short, our aim is to position Petrom as the first major producer of sustainable aviation fuel and renewable diesel in Southeast Europe by 2028. Last week, we announced the final investment decision for 250 kiloton per year capacity to produce sustainable aviation fuel, also known as SAF, and hydrotreated vegetable oil, or HVO. The high flexibility of the installation will allow us to adjust the product mix according to market demand and available feedstock.
We have already taken the first steps towards ensuring the necessary inputs and have secured 80% of the feedstock for the first 8 years. We also took the final investment decision for two electrolyzers, totaling 55 MW capacity, ensuring around 70% of the necessary hydrogen input for the SAF HVO unit. These projects will benefit from EUR 50 million of EU non-reimbursable funds. Our goal is to produce green hydrogen for own use by 2030, relying on the available EU funds options and in line with the regulated renewable fuels of non-biological origin targets.
At the same time, we continue to invest in renewable fuels by aiming to increase biofuels production with an additional 50,000 tons per year capacity until the end of the decade. This will lead to a total of 300,000 tons per year. This is a change of pace compared to our initial plan of reaching 600,000 tons per year, total biofuel capacity by 2030, reflecting the technology maturity level and market developments. Meeting net zero targets as a society means not only changing the supply mix in terms of carbon content, but also transforming the demand mix.
Currently, below 1% of the total car fleet in Romania is made up of electric vehicles. This is expected to rise to around 10% by 2030. Our plan is to build the infrastructure needed to support this change in future mobility. Capturing market and available EU funding opportunities, we now aim to have more than 5,000 charging points by 2030, and thus become the largest provider of e-mobility services in Romania. We will achieve this by leveraging our dual brand strategic value proposition, and also by stepping outside of our filling stations and focusing on other strong margin market segments.
Once again, our integrated business model plays an important role, with significant integration potential between our e-mobility offer and green power generated from our renewable powers portfolio. The charging points in our network will be supplied with our own green power production. We have also launched an international e-mobility card offer, which will enable us to position ourselves as the preferred B2B partner for electric fleets, and consolidate our position as the first choice mobility provider in Romania.
Our ambitious decarbonization plans go beyond renewable power, biofuels, and e-mobility, as we continue to look at emerging technologies. Carbon capture and storage is expected to play a critical role in reducing emissions, especially for the hard-to-abate industries. Our current focus is on securing partnerships with major players in the heavy industry. We are uniquely positioned to become a CO2 storage provider, leveraging our core EMP technical capabilities. In addition, we have high potential opportunities within our portfolio and the financial capacity to exploit them.
Therefore, we have put forward a CapEx frame of more than EUR 1 billion, and we target to store around 2 million tons of CO2 per year by 2030. CCS has a key role to play in decarbonization. However, the pace imposed by recently approved regulations at EU level is challenging. While we are working with our stakeholders to make CCS projects commercially viable, the development of CCS projects requires high investments, fit-for-purpose regulatory framework, and public acceptance. Besides CCS, we are assessing the potential for other low and zero carbon technologies, such as hydrogen, energy storage, geothermal, and biogas.
Hydrogen remains a technology to watch closely, with strong European ambitions for decarbonization, both for mobility and for industrial use. Given our equity gas position going forward, we are exploring options for low-carbon hydrogen production from natural gas. Renewable power can be naturally complemented with power storage activities, enabling the supply of base load products to customers, alleviating concerns around intermittency from renewable power production, while helping to consolidate our market position and increase value.
In addition, we are also investigating opportunities in geothermal energy and in the biogas value chains as means to support our decarbonization efforts and to tap into additional value potential. Public funding, partnering with key stakeholders to ensure profitability and stimulate demand, and technology and infrastructure development are all critical to unlock these. Our ambitions in low and zero carbon business are backed by substantial investments over the course of the decade By 2030, we plan to invest around EUR 3.7 billion in low and zero carbon projects, accounting for 35% of our total CapEx, the same with the initial target.
Most of this CapEx will be spent starting this year until the end of the decade. Since the end of 2021, we have focused on building our project portfolio and have already taken the final investment decision for around 30% of this EUR 3.7 billion. While we believe that contributing to a world with net zero emissions is the right thing to do, we are also confident that we can generate attractive double-digit returns from these investments. The allocation of CapEx depends on the development of a necessary regulatory framework, the availability of EU funds, and the pace of the technologies we are targeting.
We aim to maintain flexibility among our low and zero carbon projects. I will now hand over to Alina, our CFO, who will guide you through the updated financial frame of our strategy.
Thank you, Christina, and warm welcome from my side. Ladies and gentlemen, the past two and a half years have been very challenging, bringing events we could not envisage in December 2021, when we first presented our Strategy 2030. In addition to the human tragedy caused by war, a major energy supply security crisis have been triggered, sending commodity prices to record highs, with wider implications, not only for the energy system, but also for the global economy. EU governments responded with administrative interventions to protect consumers.
The local market had the additional challenge of frequent and multiple changes in the fiscal and regulatory sector-specific environment. Consequently, more than two years into our strategy cycle, we are revising upwards the assumptions for the main drivers of our financials. Let me remind you of the three key elements of the financial frame for our Strategy 2030: rigorous capital discipline, strong financial performance, and attractive returns to shareholders. The first element of our financial frame, rigorous capital discipline, refers to capital allocation within strategy pillars, ensuring appropriate returns and payback periods, while considering strategic and operational risks and opportunities.
With reference to returns, we increase our minimum internal rate of return to double-digit from the previous 9%. The second element of our financial frame, strong financial performance, ensures that we deliver competitive operational profits in each of our strategic pillars and business segments. Compared to December 2021, we increase our overall return on capital employed to around 15% from 12% previously. The third element is referring to attractive returns to shareholders.
In addition to our competitive growth in base dividend per share, we come today with additional guidance for yearly allocation to dividends, aimed to be between 40% and 70% of operating cash flow. This, including base and discretionary special dividends, while maintaining gearing ratio below 20%. The goal of our financial frame is to enhance shareholder value and returns. In preparing our financial strategy, we have set a sound capital allocation policy with clear priorities. First, we will invest in our organic portfolio.
Our E&P traditional business is highly profitable, including projects with returns well above 12% limit. Furthermore, we will ensure healthy double-digit IRRs for our low and zero carbon projects. Second, we will reward our shareholders through progressive base dividend. We are committed to increase our base dividend per share by 5% to 10% per annum over the Strategy 2030 cycle. This was already proved for the past 3 years, the increase being at the upper limit of this interval. Third, we will pursue selective inorganic CapEx to accelerate our transformation.
Fourth, we will distribute special dividends. When it comes to total dividends, base plus special, we aim to distribute 50% of our operating cash flow to our shareholders on average over the strategy period. This is an increase from the 40% previously indicated when we launched our Strategy 2030. I will now go into more details with the first element of our financial frame. We are set to be the largest Romanian private investor in the energy transition, with a total investment plan of EUR 11 billion, of which 20% is dedicated to regional gas growth and around 35% to low and zero carbon businesses.
So far, in 2022 and 2023, we spent EUR 1.7 billion, mostly to optimize traditional business, while in 2024, we entered the most intensive investment period in the history of the company. We will invest on average, around EUR 1.7 billion CapEx per year until 2026, and around EUR 1 billion per year for the following four years. This represents an acceleration compared to our plans for the first half of the decade, announced in 2021, and is mainly due to progress of renewables and e-mobility projects. Capital discipline at the project level is based on strong governance, interim monitoring of projects, and post-investment reviews. We focus on selecting the most competitive and resilient projects.
We ensure healthy returns above 12% for traditional and regional gas growth projects, while for energy transition projects, we aim to achieve above 10% unlevered IRRs. Looking now at the financial performance, our Clean CCS EBIT will see a significant increase by the end of the decade, mostly due to the regional gas and low and zero carbon projects. Our traditional business will continue its strong performance, generating cash flows to support competitive dividend distribution and investments in lower carbon future. In the second part of the decade, Neptun Deep will also start producing, contributing to the Clean CCS EBIT with approximately one-third in 2030.
In 2024 to 2026, Clean CCS EBIT will average around EUR 1.1 billion per year, mainly generated by the traditional business. Afterwards, the group Clean CCS EBIT is expected to increase to an average of around EUR 1.4 billion. By 2030, approximately half of our Clean CCS EBIT will come from Neptun Deep and low and zero carbon projects. The R&M Clean CCS EBIT is expected to gradually increase by 2030, with retail accounting for approximately two-thirds on average, reflecting higher retail sales volumes, broadened mobility services, and higher non-fuel business.
The Clean CCS ROCE will progressively increase to around 15% in 2030. Moving to the third element of our financial frame, we are maintaining our ambition to offer highly competitive dividend growth. And yesterday, we reinforced our existing dividend policy with a stronger dividend guidance. We now aim to distribute between 40% and 70% of our operating cash flow each year by 2030. The total dividends, including base and special, are expected to account for approximately 50% of the operating cash flows on average for the period 2022 to 2030 in a base case price scenario.
This represents an increase compared to our previous guidance of 40% of operating cash flows allocated to dividends for the strategy cycle. Consequently, cumulative dividend distribution for the period 2022 to 2030 almost matches our current market capitalization in the base case price scenario, which indicates the attractiveness of our shares over the course of the strategy cycle. Since the Strategy 2030 was announced, we have consistently delivered on our commitments to shareholders. For the past three years, the base dividend has increased by 10% year-on-year at the higher end of our dividend guidance.
Yesterday, we announced the details regarding the special dividend to be paid this year. This will be the third special dividend in a row to be distributed by OMV Petrom, and together with the base dividend already paid this year, will translate into a total dividend yield of 12.4%, calculated with previous year-end closing price. The proposed dividend is subject to the approval of the General Meeting of Shareholders, which will take place at the end of July. We highlight that our distributions share in operating cash flows and the dividend yield are very competitive in comparison with our peers for both reference years, 2022 and 2023.
To sum up, on the basis of rigorous capital discipline, strong financial performance, and attractive dividend distribution, we believe our financial frame enables a competitive value proposition for our shareholders, while supporting the growth of our company. With this, I will now hand over to Christina for the closing remarks.
Thank you, Alina. I wanted to touch on a couple of fundamental enablers to delivering our strategy. First, our transformation journey is enabled by digitalization, which is a driver of value and a catalyst for our transformation. We are dedicated to excellence in business operations through simplification, standardization, and automation. As we embrace the digital era, our investments in mobile platforms and self-service innovations empower our clients with greater convenience and control. We believe that data is a critical strategic enabler, and we will continue to leverage its power through advanced analytics and AI.
Our efficient processes and state-of-the-art technologies are essential for safeguarding our people, assets, and the environment. Second, we strongly believe that our strategy can only be brought to life by our people. We are proud of our highly motivated and diverse workforce that values traditional skills while preparing for the future. In 2023, we continued to measure employee engagement, maintaining very high levels. Collaboration with our new energy transition partners is increasingly leading to organizational evolution through knowledge transfer, resource optimization, and skill enhancement.
We are committed to grow our talent through intensive upskilling, with 75% of our employees undertaking digitalization or energy transition training in 2023. We will continue to evolve our organizational culture by living our core values, launched in 2022. We care, we're curious, we progress. We foster a culture of respect, learning, and decision-making, ensuring a sustainable and successful future. Let me now conclude our presentation. Our Strategy 2030 has demonstrated its resilience in a highly volatile macro environment. The strategy we presented to you in December 2021 remains the right one, with some adjustments to reflect the significant macro changes we've experienced since then.
More rapid build-out in renewables, more ambitious targets in e-mobility, slower pace in biofuels, and higher dividend distributions. Since 2021, we have made good progress. Neptun Deep, our flagship project, is moving towards first gas in 2027. This is crucial in securing our sustainable long-term growth by generating high profitability that will facilitate new investments and attractive shareholder returns. We have prepared a strong pipeline of low and zero-carbon projects, which will support our decarbonization efforts.
For approximately 30% of these projects, we have taken the final investment decision and entered the execution phase. We have and will continue to deliver highly attractive shareholder returns based on a strategy that enables our transformation for a lower carbon future. Our highly experienced team is turning this strategy into reality, transforming our company, providing decarbonization solutions to our customers, supporting Romanian society on its path to carbon-neutral future, and creating sustainable long-term value for all our stakeholders.
You are now invited to watch a short movie about our Strategy 2030 update. Afterwards, all the executive board members, as well as Martin, will be available to take your questions.
More sun. More road trips. More energy. Cleaner energy. This is what we want for the future. We started the transformation to lead the energy transition in Romania and Southeast Europe. We accelerate the low and zero-carbon projects to supply energy and cleaner mobility. We will provide natural gas for the energy transition, and we focus on current business to generate value and ensure security of supply. For our people, for our customers, for our communities, responsibly and passionately, for a sustainable future.
Good afternoon, also from my side. We are now opening the Q&A session. If you want to ask a question, use the Raise Hand function in Teams. We kindly ask you to limit your questions to three per participant, and if possible, address them all at once. ... When your name will be announced, please unmute yourself before starting your question. We will take as many questions as time permits. Once again, to ask a question, please use the Raise Hand function. We will pause for a moment to assemble the queue. The first question comes from Ioana Andrei from Alpha Bank. Please unmute yourself and go ahead.
Good afternoon. Do you hear me?
Yes, we can hear you very well, Ioana.
Okay. Thank you for the presentation. So my first question is regarding the offshore Bulgarian block. Can you tell us more on this block, and what are your expectations? Do you have a timeframe for it, or maybe a potential FID, if it will be the case? Secondly, if you could please give us more color on the power prices assumptions of EUR 90 to 120 per megawatt, and your view on what could drive prices higher towards the upper bound of the interval. And third, can you please give us more information regarding the Clean CCS EBIT 2030 target, which remains roughly the same versus the previous estimate, while most metrics were revised upwards. Can you please give us more guidance on what are the main driver of the expected higher costs? Thank you.
Thank you, Ioana, for your questions. Cristi will do Han Asparuh, Franck on power prices, and Alina on the EBIT target for 2030.
Thank you, Ioana, for the question. Yes, as you know, in December, we was announced by Total Energy that they want to step out from the exploration license in Bulgaria, in Han Asparuh. I can tell you that, beginning of June, the council minister in Bulgaria took the decision to validate this exit. So basically, we are operator 100% in the license. And as well, they took the decision to extend the exploration period with 23 months. So we are believing in the potential of the Black Sea. It's too early to talk about the FID, of course, we are in exploration.
Good afternoon, Ioana, it's Franck speaking. On your question on the power price and the range between 90 to 220 euro per megawatt hour for Romania, what we look is at the, in term of merit order and what would be the price maker on the, on the electricity market in Romania. By 2030, we still see the gas power plant as being the, the last power plant in fixing the price on the market. So the price is influenced by the mainly the CO2 price, I guess, price of course, but also CO2 price. Now, looking at the range between 90 to 120, it would depend, of course, of the, pace in term of electrification and, and the demand side.
So it's not just on the supply side, but also on the demand side, in terms of. So with a high electrification, we expect to be in the higher range.
Hello, Ioana, also from my side. With regards to your third question on clean CCS, a bit indeed, we have an increase, but this increase, it's slight there, and it was reduced to an important extent by the increasing costs, and these are coming from inflationary environment we are in, but also from additional requirements on regulatory and compliance that we have to fulfill. And, despite all our, you know, cost focus and efficiency programs, we still see something cost visible there, which reduced the positive impact coming from the better commodity prices. Thank you.
Next in line is Tamas Pletser from Erste. Please go ahead. Don't forget to unmute yourself.
Yes, good afternoon. Yeah, yeah, good afternoon. Can you hear me?
Yes, very well. Thank you.
Okay, thanks very much for the presentation. I have the following questions. First of all, what is the reason that you increased your target for renewable energy? I mean, what has changed in the last 2 to 3 years in Romania, why you now want to have 2.5 gigawatts of renewable power instead of 1 gigawatt, like in the previous strategy? That would be my first question. My second question regarding the Neptun development, am I correct with this assumption that drilling, which you start next year, is the period where the highest risk for cost overrun or the time overrun of this project? So is this the most critical period for you to evaluate that project? I'm interested in this respect of Neptun development.
And finally, on the sustainable fuels, do you expect Romania to have such a high demand by 2030 for these renewable fuels, or do you expect a part of the production to sell abroad? Thank you very much.
Thank you very much for your questions, Tamas. Franck will take the first one with regards to the increase in the renewable power target that we have. Martin will talk to you about sort of where's the critical path and critical potential cost risks, and then, Radu, with regards to sustainable aviation fuel question.
... Yes, good afternoon, Tamas, and happy to see you on the call. So in terms of the target on the rest, I think what we—when we started to develop our pipeline of project, first of all, we realized that there were some opportunities on the market, and very good opportunities, because it's not just about megawatt, but it's also about return on investment we are looking at. So we were able to position ourselves very early on the grid, and to be able to book some capacity at early stage, which was a capacity with a very high value when you look at the all the demand on the market.
And we also, as it was mentioned during the presentation, looking at potential having a pipeline to be able to rotate also some of our assets when we are built the asset, to increase the overall profitability of the portfolio. So large pipeline, and also, I think an important topic is our EU funds capability to capture EU funds, which has increased from the beginning. You know, with Oltenia, the project with Oltenia, we secure a very large amount of EU funds. With our partner Renovatio, we also already capture some EU funds. So the possibility to reduce the CapEx exposure help us also to increase our target as such. So good profitability.
We control the grid capacity in a very key area where we see very high potential, very good project in terms of renewable. Our partnership with Renovatio, and the access to EU fund. I think that's a, it's a sum of components that help us. And I think the last but not least, the demand. Radu will explain if you have the question on electrolyzer. So we decide to increase also the power demand internally for OMV Petrom, but also our customers. You know, we signed a PPA with Saint-Gobain, so also an increase of demand from our customers from our B2B customers.
Okay, I'll take the drilling question now. The wells are not particularly complex. We're actually starting the drilling early. So in terms of the critical path of the project, the drilling doesn't lie on that path. We've got a very competent contractor in Transocean, and I don't see that element of the project as particularly any riskier than any other element. So we're on track to start drilling next year as planned, and we should have plenty of wells available for first gas.
Hello as well from my side. Let's refer a bit to the expectations related to the fuels demand in 2030 and the renewable part out of it, or the biofuels in those. In 2021, when we built our assumptions for 2030, we were assuming that the demand is going to grow till 2030 on a back of, on a back of increased GDP, increased motorization index, and so on. The next years, actually, we're showing a even a higher increase than an expected one. So, our assumptions for 2030 are stay, are staying, that tw- we are, we will be seeing significant, fossil increased volumes till that moment. But, Romania, not Romania, but the whole Europe, has assumed certain targets for, for 2030.
We talk about, we talk about the REST, which is the renewable share into the transportation, or which assumes 29% or 14.5 GHG reduction versus 6% now. For this to be reached in 2030, biofuels are going to play an essential role. They are a key element, to reach this ambition of Romania and Europe in 2030. Therefore, we, we see that as a significant demand in 20... in, at the end of the decade. The entire production of HVO is going to be used for the equity production from Petrobrazi, so we will be running completely in our, in our fossil production. While for the SAF, we will be supplying airports in Romania and the neighboring markets.
So we talk for the moment at 2% from 2025 target, while in 2030 is going to be a 6%. So the demand is going to be significantly increasing in 2030, and we will be on a good position to supply the markets at that moment. Thank you.
Let me remind you that if you want to ask a question, you should use the raise hand function in Teams. The next in line is Oleg Galbur from Raiffeisen. Please go ahead. Unmute your mic.
Good afternoon. Thank you for the presentation. I hope you can hear me well. I have three questions as well. My first question refers to your updated dividend policy, which continues to be centered around future operating cash flows. Does it mean that the development of operating cash flow is the key determinant factor for future dividends? In other words, will CapEx intensity in specific years have no impact on dividends? That would be my first question. Secondly, could you share with us what made you revise downwards the target for sustainable aviation fuel production in 2030? If I got it right from your presentation, that you had a higher target previously versus now.
Thirdly, on the Bulgarian block, Han Asparuh, do you have already, or can you share already with us by when do you expect to have a first indication of potential level of gas reserves of the block? Thank you.
Thank you very much, Oleg. Alina, we'll take your question on dividend. Obviously, Radu, with regards to the biofuels targets, and, Cristi, on Bulgaria opportunity.
... Hello, Oleg, from my side. So with regards to dividends, I'll recap a bit, the criteria on which we define on the, on the dividend. So when we talk about base dividend, we have three elements which we take into consideration. First is financial performance, second is investment needs, and the third element is the long-term financial health of the company. These are relevant for the base dividend, and there we talk about progressive base dividends. So these three elements are analyzed to decide where we are in the interval, 5% to 10% growth for base dividend. That's number one. When we go to special dividends, we also look first of the market environment.
So if we are in a favorable market environment, then we are considering special dividends, provided our CapEx plans are funded and also having a gearing below the 20%. We went to operating cash flow to give you a guidance, as we listened to the feedback received from capital markets, where we wanted to have a bit more clarity around when we give dividends and to what extent. So that's why we revised our dividend guidance with a link to operating cash flow. But of course, we are considering not just operating cash flows in that year, but also the other elements that I mentioned before.
What is new now, it is the fact that not only that we have an overall increased guidance from 40% to 50% of operating cash flow over the entire period of the strategy, but we also gave a yearly guidance for saying that dividends will be overall base and special, minimum 40%, but we could-
Good afternoon, ladies and gentlemen.
We could go up to 70%, maximum. Thank you.
Okay, I will move to the question related to the new target we have for the biofuels. I think I would mention biofuels because it, in 2021, when we were communicating 600,000 tons, you were having two big segments of products considered. It was the bioethanol second generation, and then HVO SAF. So for the bioethanol second generation, 150,000 tons, we need to be cognizant on the technological evolution of the solution, existing solutions, not viable for the moment on any economics. So we are still very well connected with this topic and trying to see the right moment when we can progress on this one.
And when we talk HVO SAF, we need to be as well cognizant and realize what are the market demands and expectations. We see short term, potentially long HVO position in Europe, but... and some would say SAF would be long for the years 2027, 2028, 2029, while long, while super, super, super short market in 2030. We were not- we are not canceling that, but actually we are phasing these investments, and we still plan to bring additional HVO SAF production in place, but towards the beginning of the next decade. Thank you.
Thank you for the question, Oleg. As I said, we are in the exploration phase, basically, and this is supposed to last 23 months, starting November. So as in exploration phase, after the exploration phase is proved successful, we'll come and update you. But we are believing in the potential of the Black Sea.
The next question comes from Daniela Mandru, from Swiss. Please go ahead. Unmute your mic. Daniela, if you want to address a question, you should unmute your mic. You have your hand raised. Okay, she lowered her hand. Let's pause for a moment to see if there are further questions. Daniela, I see you again with your hand raised. If you want to address a question, you should unmute yourself. Okay. She's typing, so maybe she has some technical problems. Let's see if there are further questions from the other participants. Okay, we have next in line, Laura Simion from BRD. Please go ahead.
Yeah, hello. Thank you for the presentation. I have a question about some details regarding investments from 2027 to 2030. I saw that you gave us a breakdown by divisions, and I was wondering what are the projects in R&M? I saw that you are planning to invest about 35 of the total of EUR 1 billion in R&M. Is this for e-mobility or there are also other projects in mind? And also for the E&P, you said you will invest in traditional business about EUR 400 million, but in the breakdown, there are EUR 600 million in E&P. So the other 200 million where are directed? Thank you.
Thank you, Laura. Alina will give you some of the breakdowns that sit behind the CapEx to try and help you understand them a bit better.
Hello, Laura, from my side. So, indeed, in the interval 2027 to 2030, we invest in refining and marketing approximately 35%. We continue with the transformation, so the investments in the area of sustainable fuels will continue also in the second part of the decade. So, most of them are related to this, and of course, all traditional investments in the refinery business as well, but quite significant into the sustainable fuels. And with regards to E&P, indeed, we have a part which is related to traditional business, which you see on the graph on the left-hand side.
But in addition to that, we have carbon capture and storage, which is in the second part of the decade, and that is visible in the E&P side, in the 60% ratio that you see for 2027, 2030 for the E&P segment. Thank you.
Okay, let's try one more time with Daniela Mandru. I see her hand raised again. Dana, once again, you have to unmute yourself. We enabled your mic. You just have to unmute yourself if it works. Okay, it seems that it doesn't work. As there are no further questions, we want to thank you again for taking part in our conference call. For further information, please do not hesitate to contact the investor relations team. We wish you all the best.