Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we are very pleased you have joined us for the Oil and Gas Conference. The next presentation of the day is from OMV. Please note you may submit questions for the presenter in the box to the left of the slides. You can also view a company's availability for a one-on-one meeting by clicking Book a Meeting. At this point, I'm very pleased to welcome Corina Moza, Investor Relations Manager, and Oliver Rosenthal, Investor Relations Manager, of OMV, which trades on the OTCQX Best Market under the symbol OMVJF and on the OTCQX Best Market, OMVKY, and on the Vienna Stock Exchange under the symbol OMV. Welcome back, Corina and Oliver.
Good morning. Thank you, Greg, for the introduction. I want to say hello to everyone from Vienna. Thank you for joining us today. Over the next 20-25 minutes, I'd like to give you a clear picture of who OMV is, how we believe OMV offers an attractive long-term investment case. If we jump right to basics, so what does OMV actually do? We operate across three integrated business segments: energy, fuels, and chemicals. Together, they form a balanced and diversified portfolio that generates strong cash flow through the cycle. In energy, we explore and produce oil and natural gas across three core regions. We have Northern Europe, where we have Norway, Central and Eastern Europe, including the Black Sea, and Southern region, including Libya and the United Arab Emirates. In 2025, we produced around 300,000 barrels of oil equivalent per day and 42% natural gas.
In addition to exploration and production, the energy segment also includes gas marketing and trading across Europe, including gas storage in Austria and Germany, and a gas-fired power plant in Romania. On top of that, we are developing our low-carbon business, including geothermal and renewable power. This segment gives OMV stability, strong cash flow, and long-term growth through natural gas. Going to the second segment, fuels. Here we operate an integrated refining and marketing business. OMV itself operates three refineries in Austria, Germany, and Romania, so Schwechat, Burghausen, and Petrobrazi. In addition, OMV also holds 15% in ADNOC Refining and ADNOC Global Trading. The total global processing capacity amounts to around 500,000 barrels a day. On the marketing side, we have a very strong retail network where we operate around 1,700 filling stations across eight countries in Europe.
Here we are transforming in line with market trends, shifting gradually towards more sustainable fuels, chemical feedstock, more EV charging networks, and more services around mobility and e-mobility. Last but not least, in chemicals, we produce base chemicals and olefins. In base chemicals, OMV directly operates two steam crackers, which are physically integrated into the refineries in Austria and in Germany, and this allows us for cost-competitive naphtha supply. On top of that, we also operate ReOil, a chemical recycling plant at the Schwechat refinery, which is based on proprietary ReOil patented technology. This is, like I said, here in Austria, in Schwechat, where we recycle post-consumer and post-industrial plastics into pyrolysis oil.
Up until the formation of Borouge International, we produced olefins and polyolefins also through Borealis and these two joint ventures, Borouge with ADNOC, that's based in the U.A.E., and Baystar with TotalEnergies, based in the U.S. I will go into more details on Borouge International later, but this was a very big milestone for us that we announced just two weeks ago. On March 31st, OMV and XRG, ADNOC's international investment arm, completed the transactions to create Borouge International, which is the world's leading pure-play polyolefins company. Borouge International will be equally held and jointly controlled by OMV and XRG. Across these three segments, energy, fuels, and chemicals, we operate a highly integrated, diversified, and cash-generative portfolio with gas and chemicals as our primary value drivers. Now I want to also show you some financials that demonstrate this. The integrated model consistently delivers strong cash flows.
Here you can see the cash flow generation mix and investments, in the three segments, chemicals, fuels, and energy. Over the past five years, energy contributed 50% to the total operating cash flow, while organic CapEx in this period was around 45% into energy. The rest is split into chemicals and fuels. We were able to generate a clean return on capital employed of 13% in the past five years, and this also helped us to grow our dividends by 18% per year. This integrated model is not just a concept, it really translates into attractive returns and growing distributions. This brings me to the next slide, where I want to show you the dividend track record. You can see that we had a progressive, regular dividend that has grown consistently over time and also additional dividends in the recent years.
In the past three years, we paid out around 28%-29% of our operating cash flow and achieved a dividend yield between 9% and almost 13%. For 2025, we announced a dividend of EUR 4.4 per share, which represented, based on the share price as of end of 2025, a dividend yield of 9.3%. So you can see that OMV has a clear commitment to shareholder returns. I'll also come back later to how Borouge International further strengthened this. Next, we see what our strategic compass is. We are transforming OMV into an integrated energy, fuels, and chemicals company with a strong focus on value and net zero by 2025 across all three scopes, one, two, and three. We believe in general that gas is a key enabler of the energy transition as it remains essential for energy security, balancing renewables, and industrial demand.
Our strategy focuses on three main priorities. We want to grow gas and selectively advance renewables. We want to strengthen fuels, especially in sustainable mobility. We want to accelerate growth, which is now significantly enhanced by Borouge International, as well as we want to drive circular innovation. Of course, that's underpinning all of these are high cash flow generation, clear investment criteria, and attractive and reliable shareholder returns. The strategy is not about growth at any price. It's about disciplined, value-driven transformation. Now the question comes, are we executing hard? Across energy, we've made significant progress recently on the Neptun Deep gas development. This one is very well on track, and I am happy to give you more details on it a bit later. We also successfully diversified gas supply away from Russian gas.
Now the sources are fully diversified as OMV hasn't supplied any gas from Russia since December 2024. We secure transportation capacity to enable us to supply equity gas and third-party volumes from Norway to Austria and also LNG volumes as we leverage the share in the Gate LNG terminal that we have in Rotterdam. In addition, OMV Petrom advanced towards becoming a renewables leader in Southeast Europe. We also completed drilling and production tests for geothermal energy in Vienna, for which we are very excited about. We made a gas discovery in Norway in 2024, the Heidrun Deep Water well, which indicated significant potential in OMV's focus area, the Vøring Basin. Across fuels, our co-processing plant at the Schwechat Refinery is in operation now.
We are also working on the Petrobrazi SAF HVO plant that's under construction and on track to start operations in 2028. We are also building around 200 MW of electrolyzer capacity, our EV charging network in the past years. Around chemicals, clearly, one of the main achievements was forming and closing the Borouge International transaction. We are also progressing on the major growth projects that we have in Kallo, Borouge 4 and Baystar. We successfully started up the ReOil chemical recycling plant at Schwechat, and we made recycling feedstock. Now, I would like to zoom in on each of the segments and what are our strategic priorities for 2030. Starting with energy. In E&P, we want to execute on the increased pipeline of organic projects that we have in Romania, Austria, Norway, Middle East, and North Africa.
All of this while we focus on cost and efficiencies. We also want to pursue value-accretive inorganic opportunities that leverage OMV's strengths. In the gas marketing and power business, we want to unlock significant value by expanding and as I already mentioned, we want to make gas a key enabler in the portfolio. We expect the gas business to generate around EUR 300 million in clean operating result on average between 2026 and 2030. In renewables, we want to enable OMV Petrom to establish leadership in the power sector across Southeast Europe as we want to leverage the favorable wind and solar conditions, as well as regulation that we have in the region. There, we target more than 1.3 GW wind and solar net production capacity by 2030 and more than 2.4 TWh net electrical output per year by 2030.
Also, we adjust the pace of geothermal energy in line with learnings and economics, and we plan to have around 1 TWh net production output by 2030. Overall, in terms of E&P production, we target 400 kBOE per day, or this is our ambition, of oil and gas production. We want this to be more than 50% gas production. If you remember, I mentioned at the beginning, we right now have 58% oil, so we want to be more skewed towards gas. Also, the oil and gas portfolio cash breakeven to be below $30 per barrel. Costs are very important for us, so we want to decrease the unit production cost to be below $9 per barrel. Energy is about profitable growth in gas with a disciplined cost and returns focus.
Since Neptun Deep is such a cornerstone of this energy strategy, I would like to provide some details on the project and an update. Some key facts. This is the largest offshore gas project in the EU. It's operated by OMV Petrom, and our partner is Romgaz. Romania will likely become a net gas exporter once the production starts, and there's infrastructure in place to export to neighboring countries and further on to other European countries. Now, in terms of economics and impact, we have plateau production of around 140 kBOE per day for eight-10 years. That means net to OMV, 70 kBOE per day. Production cost is very low of around $3 per barrel. The total CapEx is EUR 4 billion, and the net to OMV, this is EUR 2 billion. The GHG emissions are significantly below the global average.
The project will start production in 2027, and we expect Neptun Deep to contribute around EUR 500 million to clean operating result in 2030. As I said, the project is fully on track and within budget. This is a high-quality, low-cost, low-carbon gas project that supports both our financial and sustainability goals. As we move on to the next segment, fuels. Our 2030 ambitions are structured along three main themes. First, the fuels value chain. We want to transform in line with market demand and shift towards more chemicals feedstock. We want to maximize the integrated margins for traditional fuels across the entire value chain. In marketing, we want to be the first mobility choice for retail customers, and we want to grow the non-fuel business through new partnership concepts with convenience retailers like Auchan or Billa, or also via our own brand, VIVA.
We also want to ramp up the EV capabilities to 5,000 charging points by 2030, where we currently have around 1,700 at the end of 2025. We want to grow the sales volumes in commercial road transport and also to expand our aviation footprint to further capture growing jet demand. In renewable fuels and feedstocks, we believe that the demand for sustainable fuels and chemical feedstocks will increase in the next year, and we want to capture this growth potential, in renewable fuels like SAF or HVO, as well as the chemical feedstock. In general, by 2030, we target a growth of 50% in operating cash flow compared to 2024. We expect that around EUR 600 million clean operating result will come from retail. This is compared to around EUR 500 million historically. We see a growth in the retail business as well.
Around EUR 200 million-EUR 300 million will be generated from renewable fuels and chemical feedstock. Fuels is also a cash-generating, transforming platform that supports both mobility and chemicals. On to the chemical segment, where Borouge International plays a central role. Our ambitions are grouped into first, the Borouge International successful merger and integration, and we also want to deliver the organic growth projects, efficiencies, and synergies that we announced that we expect from this project. In OMV-based chemicals, so the remaining business, which consists of the two crackers that I mentioned in Burghausen and Schwechat, we want to maximize the utilization of these crackers and further optimize end-to-end integration across the value chain because these two crackers are integrated in our refinery operations. We see that we can benefit from that.
In renewables and circular economies, we want to leverage technology and innovation for circular solutions, including ReOil, and we want to grow sustainable chemical volumes in line with market demand. By 2030, we target a floor dividend of more than $1 billion from Borouge International to OMV. This one should come starting 2027 onwards. For 2026, we announced that the floor dividend will be reduced as a precautionary measure in order to safeguard the strength and health of the balance sheet, given the current circumstances. We also target a cracker utilization rate of more than 90%, and we expect around EUR 200 million contribution from the OMV-based chemicals to clean operating results. Since Borouge International is so important for our strategy, I think that it's worth providing an overview on that as well. Borouge International combines three companies. First, Borealis, which is an innovative polyolefins producer with world-class technology.
Borouge, the world's largest single-site olefin complex with competitive feedstock and premium products. NOVA Chemicals, a feedstock-advantaged North American player with proprietary technology. Together, they form Borouge International with the polyolefin production capacity of around 13.6 million tons per annum. This is the world's leading pure-play polyolefin company and the fourth-largest polyolefins producer with premium products. This is pioneering technology and has a global footprint. Therefore, I think that it's clear that OMV will also benefit from it. First, I want to walk you a bit through some of the transaction steps that we took. How does this transaction look technically? As I already mentioned, the transaction closed on March 31st this year. It will be an all-share combination of Borouge and Borealis to create Borouge International. OMV injected EUR 1.5 billion into Borouge International in order to equalize ownership.
Borouge International acquired NOVA Chemicals for an enterprise value of $13.4 billion, which is funded fully through acquisition debt. As I already mentioned, there will be joint control, equal shareholding, and joint governance between OMV and XRG. Both will hold 50% at the beginning in this company. The company is planned to be listed on Abu Dhabi Securities Exchange with a future dual listing in Vienna. This will happen most likely next year, so in 2027. Afterwards, of course, the shareholding will decrease as there will be some percentage free float as well, but there will still be equal shareholding of OMV and XRG and joint control. Borouge International will do a cash capital increase for up to $4 billion to augment the investment-grade credit rating and achieve inclusion in the relevant MSCI index.
We also have the Borouge 4 project that will be recontributed at cost, which is estimated at around $7.5 billion, but not before 2029. How does this company, and how does the value translate for OMV shareholders? OMV and XRG now will hold equal shares. OMV will gain exposure to a larger and more geographically diversified and resilient chemicals company. What's very important is that around 70% of the production is in cost-advantaged feedstock regions, with the rest benefiting from feedstock flexibility. In terms of financial impact, we expect substantial synergies from scale and global integrated operations. We expect that 75% of these synergies will be already generated in the first three years. What's relevant for OMV as well is that the combination is free cash flow and Clean CCS EPS accretive.
On top of that, and probably what's most important to investors, is that this transaction strengthens OMV's shareholder distributions. This brings me to the capital allocation priorities. They are very clear. First, we have organic CapEx. For the period 2026 to 2030, we expect on average an organic CapEx of around EUR 2.8 billion, with higher CapEx in the first years due to the current growth projects, especially in 2026 due to Neptun Deep. Second, attractive and reliable shareholder returns are very important to us, so the dividends that we pay to our shareholders. Thirdly, we want to do M&A to accelerate growth and transformation, but we are guided by strict investment criteria, so we will not just do any M&A to achieve our ambitions, only if they are value accretive.
Four, last but not least, we have a mid to long-term target leverage ratio below 30%, while we want to maintain investment-grade credit rating. I would like now to show you our dividend policy, our second capital allocation priority, which we updated recently to account for Borouge International. We maintain the principle of a progressive regular dividend plus an additional variable dividend when leverage ratio is below 30%. Starting with the financial year 2026, which is to be paid in 2027, OMV will distribute 50% of Borouge International dividends attributable to OMV, + 20%-30% of cash flow from operating activities excluding those Borouge dividends. Borouge International directly enhances our ability and capacity to pay attractive dividends in a transparent, formula-based way. Let me close with our investment case very shortly.
OMV combines strong cash generation today with structural growth in gas and chemicals under a disciplined capital framework and a clear commitment to shareholder returns. Thank you very much for your attention and your interest in OMV. I'm happy to take a few questions now for the limited time that we have, and I look forward to continuing the conversation also in the one-on-one meetings later today or in May.
Now I will invite Oliver, my colleague, to join us.
Hi, Corina. We've received quite a few questions on Borouge International, also related to the dividend outlook. What is the outlook for the Borouge International dividend? Maybe you could take that one.
Yes. In terms of Borouge International, we announced some changes. I think it was around mid-March, and I can provide an update there. On one hand, we announced a change in terms of the Borouge 4, which is our growth project that is separate from Borouge International. This is a new integrated polyolefin production complex with 1.5 millionton ethane cracker and 1.4 million tons polyethylene capacity. There is now an agreement that enables Borouge Plc, and then subsequently Borouge International, to operate and market the volumes of P4 in return for an at-cost asset utilization fee. However, what does this mean is that the recontribution of Borouge 4 to Borouge International will only happen later in around, we expect not earlier than 2029. That was one thing.
Second, the capital structure of Borouge was recognized by strong credit ratings, so we received a negative Baa1 and A- ratings from S&P, Moody's, and Fitch. That confirms the strong financial position. What has changed is that we were planning initially to stock list the company in 2026. Given the current environment and current circumstances, we expect the standard offer to take place only in 2027, subject to market conditions. Until then, Borouge International will be privately held and Borouge Plc shares will still be listed on the Abu Dhabi Securities Exchange. The expected credit ratings factor in the impact and flexibility on timing of both the future equity raise and the planned acquisition of Borealis by Borouge International. That brings me to the last point, and I think to what the question was also more related to.
Considering the current market environment, OMV and ADNOC agreed to strengthen the balance sheet of Borouge International as a precautionary measure. This will entail a temporary adjustment of the dividend payment for financial year 2026. What that means, we will receive 50% of the originally planned dividend. Planned was $1 billion. This year we will receive half of it. What this means for OMV dividend itself, the impact on the dividend per share for OMV would be around $0.6-$0.7. This is lower than what we initially assumed. However, going forward, we still expect the floor dividend of $1 billion to resume starting 2027.
Of course, as the growth projects are coming on stream, NOVA Chemicals also has some projects and there's Borouge 4, Baystar will be fully ramped up. We expect that there's growth in the cash flow, net income, and therefore also in the dividend, and the dividend floor should increase towards the end of the decade.
Thanks, Corina. We have some further questions on Borouge International. Here's one. Borouge International has a very resilient margin profile and over $500 billion of EBITDA. Do you think the market is still underestimating for OMV?
I think that now I speak purely from discussions that we had with analysts, but I think that the synergies are not fully reflected, either in the valuation of Borouge International or in the valuation of Borouge International as a participation of OMV. These are most likely not reflected, and also some of the growth projects that are going to come on stream might not be fully reflected. Which is, in my opinion, not very fair because most of the CapEx for these projects has already been spent. Now in the upcoming years, we should see benefits coming from these projects.
Thanks, Corina. Maybe moving on to another area, there's a question on Neptun Deep. You've talked about more than EUR 5 billion going into Neptun Deep and first gas in 2027. How big a step change in cash flow do you expect once this project is fully ramped?
Yeah, I think that I mentioned that the gross CapEx is $4 billion, out of which OMV's net CapEx is $2 billion. In our CapEx projections, you would see the $2 billion accumulated figure. In terms of cash flow, I would like to maybe show you a slide where you see what our free cash flow was in 2024. We had EUR 2 billion, and we expect this to increase by more than 50% by 2030. First, what helps us achieve this is that the CapEx will come down after 2028 since most of our growth projects, like the SAF HVO plant in Petrobrazi, Neptun Deep, all of these projects are very CapEx-intensive in the first years, but then we should see benefits coming from this.
In addition to that, until now, we fully consolidated Borealis, and we are deconsolidating it right now, and we will at equity consolidate Borouge International. We will register the dividend we receive from them in our operating cash flow, but no CapEx. Therefore, this translates into a free cash flow for us. Yeah, that's why we expect a much higher free cash flow in the future.
Thanks, Corina. I think this brings us to the end of the Q&A.
Yes, I think that there are many questions. I see them now. I am very happy to see them, and I promise that we will follow up with you on all these open questions. Otherwise, I would be also happy if you register for the one-on-one meetings with us now or in May. Thank you very much.