OMV Petrom S.A. (SNP) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and a very warm welcome to our 2026 Capital Markets Day. It is a great pleasure to greet those of you here with us in Petrom City, and a warm welcome to everybody who is joining us online. For those of you here in Petrom City, we will just have a short safety moment. We do not have a fire exercise planned for today. So in case of there is a fire alarm, it is real. And we will evacuate through the exits at the back of the room, and we'll leave the building through the front door that you came in, when you arrived, and we will gather outside in the visitors area, MP12 in the front of the building in the parking and be assured we will escort you there. Before entering into our presentation, let me draw your attention to the cautionary note regarding forward-looking statements at the beginning of this presentation. I am here today with my Board colleagues, Cristian Hubati, Franck Neel, Radu Caprau and Alina Popa. And together, we will update you on the progress of our Strategy 2030. In a context shaped by energy market volatility, geopolitical uncertainty and an evolving pace of transition, we will show today how OMV Petrom has continued to execute its Strategy 2030 with discipline and is transforming for a resilient future. What is transformation for resilient growth? Firstly and foremost, we are growing the company with an additional 50% of EBIT by 2030. Our growth is underpinned by integration that strengthens our resilience, connecting traditional energy, regional gas, power and sustainable transportation into a portfolio built for changing markets. We are decarbonizing our products in a measured and pragmatic way, in line with market expectations, allocating 25% of our CapEx to low and zero-carbon projects with strong returns. And in doing all of this, we are growing total shareholder returns, having delivered already 160% of total shareholders during 2022 to 2025. What connects all these elements is discipline, discipline in capital allocation, discipline and execution, discipline and costs and disciplined in how we balance growth, resilience and returns. Thus today, we will walk you through the progress in executing our Strategy 2030 and reconfirm our investment proposition. We are now halfway through the execution of our Strategy 2030. What started in 2021 as a bold plan is now through tangible delivery, transforming OMV Petrom. Our Strategy 2030 provides for three areas of strategic growth. First, Black Sea gas. Neptun Deep is advancing towards first gas in the first half of 2027. We are also pursuing Black Sea exploration opportunities to further strengthen our position and support the region's energy security. Natural gas remains central to our growth in Southeast Europe, providing secure diversified supply with lower emissions. Second, integrated power. On the generation side, we are bringing together renewables, battery storage and our flexible gas-fired capacity at Browse power plant. This balanced portfolio will improve our market positioning and enhance value captured across multiple markets. We are targeting to enrich our offering towards customers supporting the region's decarbonization. And third, under the umbrella of sustainable transportation, we are developing a solid position in sustainable aviation fuel and hydrotreated vegetable oil, products obtained using renewable feedstock. The new unit under construction in Petrobras will position us as one of the largest sustainable fuel producers in Southeast Europe. This, together with our e-mobility investments supports tangible lower carbon options for our customers and contribute to the regulatory-led decarbonization of road and air transportation in the region. Our transformation is anchored in our strong integrated traditional business, which provides the cash flow needed to invest in future growth. To deliver on these growth priorities, we are strengthening the capabilities that support execution. We are becoming faster, more efficient and more digital while continuing to stay focused on operational excellence and disciplined cost management. Our robust execution is translating directly into financial strength. Strong cash generation and disciplined capital allocation allow us to invest in our transformation while delivering attractive shareholder returns. Strategy 2030 is reshaping our asset base and without increasing our cash flow. Gas growth from Neptun Deep, the expansion of our integrated power business and investments in the future mobility create a more resilient, lower carbon and more valuable OMV Petrom for our shareholders. Taken together, these strategic growth areas are expected to increase profitability by around 50% by the end of the decade. This increase is supported by projects with final investment decisions or high visibility. So this is not an aspirational case. It is an execution case. At the same time, our financial framework is unchanged. The overall investment remains at EUR 11 billion for 2022 to 2030. Within this, we are allocating capital opportunities with clear strategic fit, proven technology and attractive returns while reducing exposure to less mature options. This is how we balance growth with resilience. We are investing in the future of OMV Petrom with a clear focus on returns, cash generation and sustainable value creation for our shareholders. Since the launch of our Strategy 2030, we have been very consistent in how we reflect performance into shareholder value. Our dividend policy is translating business performance to competitive total shareholder returns. We have combined progressive base events with special dividends, resulting in competitive total distributions each year and an average dividend yield of around 13% over the past 5 years. At the same time, our payout ratio consistently outperforms the median of both the global majors and the regional peers while preserving a disciplined approach to cash distribution. Together with share price appreciation, this has translated into total shareholder return from 2022 to 2025 of around 160%, substantially higher than both global majors and regional peers. With a strongly integrated portfolio and a clear path towards providing lower carbon energy, we are well positioned for resilient growth. Neptun Deep, our low carbon investments and the discipline in our traditional business are expected to drive stronger cash flows and earnings, supporting our ambition 15% return on average capital employed by 2030. This financial strength is intended to translate directly into shareholder value. Our dividend policy remains a clear commitment progressive base dividend, complemented by special dividends in a favorable market environment and provided that our investment plans are funded. Since 2021, the external environment has changed significantly. Europe has faced energy crisis, geopolitical tensions have intensified and regulatory interventions have become more frequent. All of these have made the combination of energy security, affordability and competitiveness even more forefront in the energy dialogue. At the same time, the energy transition continues, but not in a straight line, not at the same pace across all markets and technologies and not at the pace initially expected back in 2021. Renewable power and storage are gaining scale. Electrification is progressing, and lower carbon solutions are becoming increasingly relevant. However, the transition is also facing headwinds. Infrastructure limitations, permitting delays, volatile commodity prices and regulatory pressure. Against this backdrop, our strategy has proven resilient. We remain committed to our strategic direction, our investment pillars and our dividend policy while adapting our capital decisions to market realities and the evolving pace of the energy transition. Looking ahead, we continue to see good growth fundamentals in our region while experiencing macroeconomic and political uncertainties. GDP per capita in our core markets is still projected to grow faster than the EU average. This reflects rising living standards, economic activity and energy demand. At the same time, the demand mix is gradually changing, driven by electrification, mobility trends, deeper carbonization policies and the need for secure and affordable energy. While the mobility mix is gradually evolving, lower motorization in our region means that there is still room for traditional fuels demand to remain robust by 2030, even as electrification gains traction. Gasoline is expected to exhibit double-digit growth for the remainder of this decade, supported mainly by the evolution of hybrid cars. Hard to decarbonize sectors are expected to keep diesel volumes structurally high with modest growth to 2030. Aviation fuels, including SAF are expected to grow even faster the latter based on mandates imposed by refuel EU aviation regulation. In gas, we continue to see growth in our operating region towards 2030. In Romania, this reflects both a recovery from the lower consumption levels seen after the price volatility of 2022. and the emergence of new demand, including from power generation and industrial consumers. Gas will remain essential for flexibility, security of supply and the balancing of renewable power. The region's demand is also expected to be supported by gas growth in some sectors, most notably in power. In power, demand is expected to increase supportive electrification across the economy and by the development of e-mobility. This reinforces the logic of building an integrated power portfolio, combining renewable storage, flexible generation and trading capabilities. For some of our products, especially with lower emissions, growth will continue to 2040. After 2030, we expect demand for gasoline and diesel to begin to draw following the same demand trends seen in developed countries. At the same time, aviation demand is expected to continue growing towards 2040, which makes the decarbonization of air transport, 1 of the key opportunities for our region. Post-2030, we expect domestic natural gas consumption to decline as lower operating rates for gas-fired power plants are forecasted while the share of renewable sources in the electricity mix increases. However, we estimate natural gas to continue to play a key role in the regional energy system through 2040 as a balancing source of renewables and enabling emerging technologies. So energy demand is changing and transforming and with that, so is our portfolio. Through regional gas, integrated power, sustainable fuels and e-mobility only Petrom is well positioned to capture this changing demand while continuing to support energy security and lower carbon emissions. Let me now turn to the market assumptions that frame our strategy. As we look towards 2030, we continue to expect volatility to remain a structural feature of the energy markets. Commodity prices will move with global supply and demand, geopolitical developments, regulatory decisions and the pace of the energy transition. This is why we do not build our strategy around a single price scenario. We built it around resilience, flexibility and value creation. In our base case, we have updated several price assumptions to reflect the latest market outlook, while continuing to manage the business for recreation across the strategic cycle. The current situation in the Mideast reinforces the need to plan for volatility. At the same time, for 2027 to 2030, our assumptions are pointing towards a more balanced oil market than expected 2 years ago. As a result, we are using slightly lower Brent assumptions for the rest of the decade, supporting investment discipline and resilience across market environments. For gas, we increased the upper end of the range compared to our previous Capital Markets Day. For Power, we reduced our base load prices and we now show also the indication of capture prices for wind and solar as this better reflects the revenue profile of our renewables portfolio than baseload prices. We now assume a lower CO2 price path, not because the direction of decarbonization has changed, but because recent market signals point to a more gradual progression. Recent years have demonstrated our ability to adapt and perform to changing circumstances. Adoption has always been part of Ombipetron's DNA. It is what has helped us navigate uncertainty in their path and it's what gives us confidence that we can continue to create value and seize opportunities ahead. While our strategic direction remains unchanged, we maintain a flexible portfolio of opportunities adjusted to market demand, technology maturity and value creation potential. Black Sea gas remains at the core of growth. We are reinforcing our position through Neptune Deep a stronger exploration focus and a broader regional gas platform that supports security supply in the region. In Power, we are building an increasingly integrated regional business. renewables, power storage, trading and commercial optimization will work together with our flexible gas to power generation to capture value across the power chain and support the decarbonization of the regional energy system. In mobility, we continue to combine a high-performing traditional fuels business with scalable, low-carbon solutions, including biofuels and e-mobility. This allows us to respond to changing customer demand while protecting our cash generation capabilities. Together, these activities support resilient cash flow and profit generation while enabling continued transformation, attractive shareholder returns and GHG targets aligned with market realities. I will now hand over to Christi, who will provide a deeper view on how we're advancing our regional gas growth agenda, exploration activity and our broader E&P portfolio.

Thank you, Christina, and good afternoon, everyone. Let me continue with exploration and production and explain how our portfolio supports OMV Petrom growth agenda. As Christina mentioned, Black Sea gas is 1 of the 3 areas of our strategic growth. For E&P, this means 3 priorities: delivering the Neptun Deep project safely, on time and on budget, expanding our exploration options across the Black can and continuing to manage our mature asset base with strict capital and cost discipline. The Black Sea is the cornerstone of our growth strategy, and we strongly believe in its long-term potential to contribute to both regional energy security and economic development. While discoveries in the recent years confirmed the Black Sea potential, our regional portfolio covering activities from exploration to development and production, gives us a strong platform for future activities. We have been producing oil and gas in the Black Sea through Petromar for more than 40 years, providing more than 10% of our current production. The development of Neptun Deep will add approximately 70,000 BOE per day. turning Romanian Black into a major contributor to our production. While Tunde is progressing towards production, we are also looking beyond first gas. The Black Sea is an emerging basin and we continue to explore its potential through 4 exploration blocks in Romania and Bulgaria. I'll come back to this with more details later in my presentation. But first and foremost is the corner of our portfolio. Neptun Deep is a game changer for OMV Petrom for Romania and the wider region. It will unlock 1 of the European Union's largest natural gas resource strengthening energy security, reduce Romania's dependency on import and support economic growth. At the same time, it can provide the energy needed to support Romania's broader transition to a lower carbon energy system. Execution is progressing well, and the project has reached more than 85% and of the total progress. As announced yesterday evening, we are targeting first gas in the first half of the next year and plateau production by the end of Q3 2020. And -- from an economic perspective, this is highly attractive investment with around EUR 4 billion of development CapEx and -- the project is expected to deliver approximately 140,000 barrels of oil equivalent per day at plateau for nearly 10 years. And the Neptun project is more about the scale. It is also -- it's not only about scale, but it's also about the quality of the execution. As planned, the project moved faster than the industry average. -- with first gas targeted around 2 years earlier, comparable with offshore development similar of this scale. The project has been designed for remote operation with a modern offshore concept and the lower emission intensity compared with the industry average. At full plateau production, Neptun Deep is expected to contribute around EUR 0.5 billion to our 2030 EBIT. So it is not only a major step for regional energy security. It is also a major step in the earnings and cash generation profile of our E&P business from 2027 onwards. -- supported by highly competitive production costs, -- we expect the project to generate an IRR above 12% over the lifetime. The expected economic contribution for Romania is also substantial. According to an independent study, Neptun Deep is expected to generate around EUR 20 billion in budget revenues. -- and to create or maintain approximately 9,000 jobs. In addition, the project is expected to contribute around EUR 40 billion in economic added value through direct activity, supply chain effects and broader economic impact. So Neptun Deep is not only a major offshore development, it is a project that support public revenue, employment, industrial activities and long-term energy security while also contributed to a transition towards a low emission carbon economy. And with the broader impact in the mine, let us show you a short video highlighting the progress we have made on this strategic project. [Presentation]

Pretty impressive. Neptun Deep is the cornerstone of our offshore business and also the platform for future growth. Over the past years, we have built the capabilities required to operate safely and effectively offshore from shallow water to a deepwater, operation through the value chain to the execution and production. These capabilities are now a strategic advantage, and they enable us to pursue additional offshore opportunities with discipline and focus. Our exploration program is built on a deeper understanding of our existing acreage as well as a growing acreage position. By 2030, we plan to allocate around EUR 100 million to new offshore opportunities in Romania and Bulgaria. We focus on competitive portfolio options that leverage our existing knowledge infrastructure and regional position. In Romania, this includes potential exploration wells like Anaconda and Cormoran. In Bulgaria, we're assessing options in Hanau and preparing the campaign Hunter, broadening our understanding of the regional basin. So while Neptun Deep remains the main growth driver for the second half of the decade, our exploration activities may give us additional optionality beyond 2030. It reinforces our offshore position, support regional energy security and keep OMV Petrom well placed to capture future offshore gas opportunities. The Neptun Deep gas complements our existing production assets. We continue to manage the traditional business portfolio with the same principle that guided our overall strategy, value over volume. This means concentrating capital on the most attractive barrels, maximizing economic recovery from existing assets and focusing on near-field opportunities where we can leverage infrastructure, sub-surface knowledge and operation excellence. At the same time, we are reshaping our portfolio to make it simpler, more resilient and more efficient. A streamlined footprint, strict cost discipline and continued modernization allow us to protect cash generation, even as the asset base matures. Traditional production is expected to remain broadly flat in 2030 compared to 2025 while portfolio optimization, strict cost management and continued modernization support resilience performance through 2030. With an operating cash flow breakeven at approximately USD 30 per barrel oil equivalent, the portfolio remains positioned to generate cash while meeting our operational efficiency objectives. Looking at the E&P portfolio as a whole, the impact of Neptun Deep become visible from 2027 onwards, when E&P is expected to become materially more cash generative, driven by Neptun Deep. At the same time, production costs per BOE of our overall portfolio is expected to reach approximately USD 9 per barrel, supported by the scale and competitiveness of Neptun Deep. Taken together, our E&P portfolio combined near-term cash generation with disciplined exploration and long-term resource optionalities. This gives us a resilient E&P platform, anchoring cash flow for -- from our mature assets, enhanced by Neptun Deep and complemented by selected exploration across the region. I now hand over to Franck, who will show you our Gas and Power business -- how our Gas and Power business convert this strong supply position into market access, commerciality, flexibility and integrated value creation.

Good afternoon. I'm very pleased to be with you tonight -- today, tonight, maybe later, not today. You may hear a very slight French accent, so I'll try to speak slowly to make sure that you understand me. So thank you, Cristian, for the introduction. And -- let's start. So I think you see here the map of the region, and I think it's very important to focus on the region for our Neptun gas and the contribution to the regional security of supply. As Cristian explained, Neptun Deep will materially strengthen Romanian gas position from 2027 onwards. For Gas and Power, the key question is how we convert the stronger supply position into value. The answer is market access, flexibility and integration. So Romania is expected to move from an import dependence toward an export potential, and this mainly changed the role we play in this region. With existing infrastructure connected, Romania to its neighboring market, we built our ability to serve demand both domestically and across the region, especially in countries that are expected to remain structurally dependent on imports. Romania is a very attractive market, given this proximity and lower transportation costs, market access. And looking at the contract signed until now, most of them are delivering in Romania and the end user cover a broad range of industry for manufacturing to logistics, tourism and other services. In terms of volume, approximately 1/3 of the quantity contracted with Romanian customer at the moment. Our market access and trading capabilities to optimize sales across the market and across the countries, as you can see on the map. Over the past 2 years, we have already expanded our business-to-business activity in Bulgaria and Hungary, and we see further opportunities to broaden our regional presence, both in gas and in power. Gas and Power is enforcing its important role as value bridge, connecting the gas growth delivered by Cristian's team with local and regional customers, power markets and integrated opportunity across the value chain. Based on our gas marketing strategy, we target to reach a total gas sales of more than 70 terawatt hour by 2030, including the Neptun Deep volume. And we are looking to optimize the mix between the quantities sold and our contract and spot markets at European hub and local market linked price. Let me move now to the Power business, where our objective is to increase the value by strengthening original footprint with a lower carbon integrated and flexible portfolio of assets. And here, you can see on the drawing what we are looking at. The logic is straightforward, is renewable generation, give us opportunity to meet growing low-carbon power demand with a flexible gas-fired generation at brass power plant complemented by battery storage, to help manage the renewable interment and support optimization across portfolio and deliver a green product to our customer. Together, this element as to capture value from generation and also from integration, balancing and trading, using AI to optimize our position. On top of the 0.9 gigawatts of gas-fired power plant in bras, we have already secured more than 1.3 gigawatt of renewable power project net to OMV Petrom, as we have a joint venture with partners, most of the case. To this, we are adding a net target of more than 0.3 gigawatts of battery storage by 2030. This gives us both scale and flexibility as the original power market evolves. At the same time, we are expanding market access and cross-border trading capabilities. This is important because value and power will increase come being able to optimize across technology, market and time frames from renewable, from storage and flexible generation to commercial solution for customers. By 2030, we continue to target more than 6 terawatt hours of annual net electrical output while green power will represent more than 30% of our power sales. So our power strategy is about adding capacity and about building a large integrated platform that support decarbonization, improve flexibility and creates value across the energy chain. Let me now go on a little deeper into our renewable portfolio. Objective is not simply to add megawatt, is to build a capital-efficient portfolio with a mix from wind and solar and battery. It's -- that is why we are combining scale with discipline using a diversified funding model and working with partner, we have improved capital efficiency, project financing and execution capability. We are investing approximately EUR 1 billion in renewables with an attractive expected return profile. Our portfolio is already moving from development into delivery, around 0.8 gigawatt is under development and more than 50-megawatt is already operational. These figures are net of OMV Petrom. By end of this year, we expect to reach the 300-megawatt growth in term of operating assets, which is a very good progression. By 2030, this gives us a clear path to growth, net renewable capacity of more than 1.3 gigawatts of annual production of more than 2.4 terawatt hour. But at the end of this decade, we're expecting to account for 55% of our total renewable production with PV contributing the remaining 45%. This asset will not stand-alone. This will be integrated with battery storage or is extend flexible gas power generation and our trading capabilities. This allow us to optimize production, manage intermittency and capture higher value across the power chain. And importantly, we are scaling this portfolio with capital efficiency in mind using a mix of own equity, EU grants, bank financing to support further execution while protecting returns. In this way, in a growing and fast developing market environment, we are becoming one of the few integrating renewable power storage and gas-fired power generation player in the West region, transforming low carbon energy into predictable output. Digital transformation is also a major focus, for us, enabling the development of an integrated power system by connect renewable convention and battery assets through real-time data -- forecasting automating position management and algorithmic trading. So it's a complete new also IT platform, which is under construction. This will contribute to creating a virtual asset capable of optimizing dispatch and capturing value across multiple energy markets. Our model is clear, renewable provide the growth platform, integration provides a value uplift and disciplined funding project return. We are now moving from portfolio build up to visible execution. And here, you can see on the map where our main projects. More than 60% of renewable projects are reached final investment decision, demonstrating tangible progress on portfolio development towards execution. Our model combined, as I mentioned, partnership with fully owned projects. This allow us to scale faster share execution capabilities where it makes sense and remain disciplined in how much capital we want to deploy. They also gave us access to a balanced technology mix with Solar representing around 2/3 of the portfolio and wind around 1/3 of the 2030 target capacity. Objective is not simply, as I mentioned, to add capacity, but to build the portfolio that creates earnings support decarbonization and strength of integrating the Power business. Taking together those projects are expected to contribute around EUR 100 million to EBIT in 2030. Let's come on top of our traditional Gas and Power activity that estimated to contribute by approximately EUR 150 million. So Gas and Power, around EUR 250 million for the group EBIT by 2030, EUR 100 million the renewable of EUR 150 million for the nonrenewable traditional business. Before handing over to Radu, let's watch together a short video highlighting how our renewable power portfolio is moving from blends into execution. [Presentation] Thank you. And now let me hand over to Radu.

Thank you, Franck. Sorry for missing the French accent. Good afternoon, ladies and gentlemen. We'll be exploring a bit the value of the refining and marketing and the contribution that we are building and bringing to the strategy execution for 2030. And of course, it's not only about our company, but it's as well about the transition of Romania and what's going to be our contribution in Romania and in our region. I will start with a snapshot of our refining activity, a major source of value creation and the cornerstone for our development plans. Our continued investments in Petrobras of over EUR 2 billion over the past 20 years have contributed to building compliant, reliable and flexible refinery with top operational availability in the region and in the EU. Our license to operate is built on meeting the highest environmental standards and complying with all regulatory obligations. We have consistently delivered on these commitments, supported by investments of more than EUR 200 million in the last 5 years. Gradually increasing the turnaround cycle from 2 to 5 years, accompanied by various refinery debottlenecking initiatives contributed to consistently increasing reliability and above average utilization rate. The next turnaround is scheduled for 2027 when we expect the utilization rate of around 85%, while our target remains to maintain high utilization rates of over 95% on average for the rest of the year to 2030. Another focus, especially in recent years was to increase flexibility to process a wider range of crude types. To that end, we expanded our logistics infrastructure the installation of the second crude oil tank in Petrobras, additional storage capacity in constant support, alongside improving technical sulfur acid gas treatment capabilities. We see good basket flexibility as a major advantage, especially during volatile supply markets and the key support for maintaining a high refinery utilization long term. In recent years, we also finalized investments aiming at switching production to higher-value products such as the new aromatic complex, increasing our tolling output to 100,000 tonnes per year, and in projects boosting the performance of our reforming and diesel hydro units, to increase volumes of high-quality gasoline and diesel. Additionally, we focused on accelerating Petrobras digital transformation through targeted solutions across the key operational areas, asset performance with predictive monitoring to optimize cleaning schedules. Energy efficiency to detect losses and validate performance. Emissions monitoring via CO2 dashboard, process safety through expanded CCTV coverage and remote monitoring and field operations by digitalizing, for example, wagon inspections. All these steps are part of the journey to turn our vision of long-term competitiveness from our refinery into practice, focusing on two main pillars. First of all, optimizing traditional fuels production through capturing benefits from the value chain integration with our E&P production and sales channels, high utilization rates in order to respond to a resilient traditional fuels demand and continuous focus on efficiency. Secondly, gradually becoming an integrated platform for supplying future mobility solutions, with the addition of biofuels and the inclusion of green hydrogen in the production processes. Our next slide shows the strong progress we are making on our journey to become the first major producer of renewable fuels in Southeastern Europe. Our EUR 750 million project to build a SAF/HVO plant and two green hydrogen facilities is progressing as planned, and we'll have a bit more details of the project execution in a minute. The project allows us to respond to increasing biofuels demand in our region, already visible, especially when you talk about SAF, sustainable aviation fuel, and expect it to further increase with EU blending mandates rising from 2% in 2026 to 6% in 2030. We have a strong aviation footprint in Romania, and we are already a major as a SAF supplier for the main Romanian airports. The green hydrogen component ensure compliance with EU regulation while benefiting from the EU funding with EUR 50 million non-reimbursable grant, received from the national recovery and resilience plan yesterday, With the SAF/HVO project, the majority of our 2030 targets will be delivered. For the remainder of 50,000 tons per year of biofuels and 7,000 tons per year of green hydrogen, we are currently exploring new projects in the areas of biomethane and core processing and additional green hydrogen. The achievement of these targets is expected to generate a contribution of around EUR 130 million to 2030 group's total clean CCS EBIT. Our SAF/HVO project has reached more than 65% total progress and is now advancing -- in advancing stages as the construction works and integration of the operations are progressing. Main civil works for the SAF/HVO plant as well as the heavy lifting activities are finalized. Construction advances according to plan across all work fronts, including underground works, secondary steel structure election, equipment installation and fabrication. The green hydrogen facilities are also almost complete with all electrolyzer modules delivered and installed and mechanical completion achieved. In the next months, we will handle utility testing and commissioning. The gradually start operations soon after should follow. In addition to these two main project components, we are also undertaking some essential infrastructure upgrades, a new electrical power system and the new flare system, which will serve both biofuels and green hydrogen production and other processes in the refinery. We have a comprehensive strategy on the biofuels project. We have already secured more than 80% of the feedstock for the first years of production, while also planning for a new storage tank for finished products in order to support logistics. Marketing has also started with around 25% of the first 5 years production already contracted. And finally, I would like to emphasize the high safety standards so far among our priorities in everything we do. We have prepared a short video to showcase some of the highlights during project execution. [Presentation]

Progress is happening every day tomorrow for the ones that are going to visit the refinery, we might see some more progress as well. Moving to retail business. Our dual brand strategy and initiatives in recent years have allowed us to capture market opportunities and come very close to reaching our 2030 targets were in advance. Major initiatives are focused on three main directions. First, our partnership with to deploy convenience shops in all Petrom-branded filling stations is the first large-scale partnership between a fuel network and a grocery retailer in Romania. Second, continuous innovation in the gastro portfolio and expansion of our shop offering with a wider selection of beverages and healthy snacks, including our own label products under the brand present in the OMV filling stations. Third, leveraging loyalty apps for both Petrom and OMV branded locations, with accumulated number of users of around 2 million, contributed to increased customer retention and higher frequency of visits. By 2030, we plan to continue increasing our presence in high traffic areas as Romania highway infrastructure develops, to strengthen our successful convenience partnership strategy and further pursue product innovation with the objective to remain our customers' first choice. Digital tools are essential to help us evolve to customers' proposition and strengthen our network economics. We are using digital solutions to improve efficiency by automating convenience products, inventory management, optimizing food production based on sales prediction and reducing manual effort to electronic shelf labels. Moreover, self-payment terminals for fuels and services generate additional efficiencies while also leading to an improved customer experience. Part of our solution for the future of mobility is building the largest infrastructure of charging points. To reach -- our ambition is to reach around 5,000 units by 2030 in our operating region. Although demand for electric vehicles has been fluctuating in recent years, we believe that the future of transport will be a mix of options with electronic mobility, gaining traction. Positioning us an early mover has allowed us to secure access to grid, leverage the best high-traffic locations and benefit from EU funding opportunities. The first years of developing development focused on rapid scaling through M&A, and building mostly fast and ultra-fast chargers in our best locations. As of June 2026, our EV charging network comprises approximately 1,550 charging points across filling stations and destination locations, such as shopping malls and hypermarkets. Charging services are currently available at around 1/3 of our filling stations locations, diversifying our customer proposition and supporting our nonfuel business performance. Next, we plan to continue implementation in our filling stations while also expanding in third-party locations and B2B segment, adapting the base market development with the aim to achieve around 2,500 operational charging points in 2028. We see these businesses complementing our integrated mobility offer and consolidating our leading position in the mobility segment in the region, while also generating additional synergies with our renewable power portfolio. In short, we believe our diverse product portfolio in refining and marketing, is ready to capture future opportunities coming from changing mobility preferences, and that is a competitive differentiator in the long run, building on integration, high-quality customer experience and digitalization as major growth in With this, we have shown you how our business divisions are progressing from strategy into execution. Let me now invite Alina to explain our financial framework. Thank you very much.

Good afternoon, ladies and gentlemen. I'm really happy to see you today in Petrom City and also thank you to those watching us online. Let me now present to you the financial framework that underpins our Strategy 2030. As we are in the most intensive execution phase of our strategy, capital and performance discipline continue to remain at the core of our financial frame. This means allocating capital to the right projects, preserving the strength of our balance sheet and turning stronger business performance into value for investors. We are maintaining our overall investment of approximately EUR 11 billion from 2022 to 2030, of which EUR 5.4 billion has been spent by end of June 2026. This framework is designed to deliver stronger earnings, returns and cash generation by the end of the decade. By 2030, our clean CCS EBIT of above EUR 1.5 billion and CCS ROACE of around 15%, supported by contribution of Neptun Deep, renewable power -- and the continued resilience of our traditional business. At the same time, shareholder return remains a core element of our proposition. We continue to target between 5% and 10% annual growth in base dividend, complemented by special dividends in case of market conditions and investment needs allow. Overall, our policy remains to distribute between 40% and 70% of annual operating cash flow, averaging around 50% over the strategy period. We are investing for growth with a clear focus on cash generation and competitive shareholder returns. Now I will go in each of the three pillars of our financial frame in more detail. Our first pillar is about rigorous capital discipline and our approach remains unchanged. Value over volume. We allocate capital to projects that enable our resilient growth by delivering strong returns, enhancing integration and advancing our transition to low and 0 carbon at an adjusted base. We are maintaining the EUR 11 billion investment amount for 2022 to 2030, while adapting the allocation to reflect market conditions and the maturity of the opportunities available to us. As already communicated this February, we reduced the share of capital allocated to low and zero carbon projects from 35% to 25% until 2030, while play pacing beyond 2030, our spend on lower carbon technologies such as carbon capture and storage, not yet economically proven for investments. The period 2024 to 2026 is the highest investment period in our history, reflecting the peak execution phase of our major strategic projects, including Neptun Deep, renewable power investments and the SAF/HVO plant. After this phase, our annual organic investments are expected to normalize towards approximately EUR 1 billion on average per year until the end of the decade. We continue to apply strict return thresholds across the portfolio, above 12% IRR for regional gas projects and traditional business and above 10% IRR for low and zero carbon projects. This ensures that we grow only where we create value. Let me now present the second dimension of our financial frame, strong financial performance. Our traditional business continues to provide a strong and resilient earnings foundation. It remains our main cash engine, supporting both the transformation of the portfolio and attractive shareholder returns. At the same time, the major projects currently under execution are expected to become increasingly visible in our earnings profile from 2027 onwards. Neptun Deep will be the largest contributor, complemented by renewable power and SAF/HVO project as these investments move from construction and ramp-up into operational contribution. This is why we expect Clean CCS EBIT to step up from around EUR 1 billion on average in 2024 to 2026 to around EUR 1.4 billion on average in 2027 to 2030, despite a lower price environment expected for this period. In other words, the investments we are making today are expected to translate into stronger profitability in the future. This earnings growth is also expected to consolidate our returns. By 2030, we expect Clean CCS ROCE to be around 15%, supported by higher contribution from strategic projects and continued focus on performance. Let me now continue with another important lever of value creation, cost competitiveness. In a market that remains volatile and highly inflationary, efficiency is not a one-off exercise. It is a structural part of how we protect margins, strengthen cash generation and fund our transformation. We have, therefore, set a clear ambition to deliver more than EUR 150 million in cost savings by 2027, compared to 2024 baseline with a full benefit reflected in EBIT. This is already well underway. By end of June 2026, we have delivered around 70% of this ambition, showing that the program is moving from plans to tangible results. Going forward, we are embedding efficiency deeper into the way we operate. This means further simplifying processes, increasing automation across operations and overhead functions and using digital tools, AI and data, more systematically to improve productivity and decision-making. These initiatives are not only about reducing costs. They are about making OMV Petrom more resilient and more agile. By unlocking synergies across all our business segments, we strengthened our competitiveness, our operating model and support our financial targets. Now let's have a look at how all above translates into attractive shareholder returns, the third pillar of our financial framework. Our first priority remains a progressive base dividend. We continue to target annual growth of 5% to 10% and providing a visible and reliable return to shareholders through the strategic period. In addition, where market conditions allow and after funding our investment program, we will complement the base dividend with special dividends. Overall, our commitment remains to distribute an average payout of 50% from 2022 to 2030, while planning to distribute dividends at a minimum 40% of previous year operating cash flow in any single year until 2030. By 2030, our operating cash flow is expected to exceed EUR 2 billion. This will translate according to our guidance into more than EUR 0.8 billion in total dividend distribution. Testing our Strategy 2030, under a downside price environment, our financial position remains resilient. We will still be able to support our progressive base dividend, maintain largely unchanged our 2030 investment plans and keep gearing below 20%. In this context, please also refer to sensitivities of our operating profit to changes in relevant market price quotations provided in our backup slides. Let me also address our decarbonization pathway as this remains an important part of how we deliver Strategy 2030. As shown throughout today's presentation, our approach is pragmatic and value-driven. We are reducing the emissions of our own operations while investing selectively in low-carbon businesses where we see resilient demand, mature technology and clear route to returns. Our Scope 1 and 2 we have already made solid progress with a reduction of 19% at the end of 2025, and we remain committed to our 2030 target of a 30% reduction, both versus 2019. This is supported by continued energy-efficient measures, metal reductions, operational improvements and the increasing role of lower carbon energy in our portfolio. For the broader energy supply, however, we also need to reflect market realities. The transition is progressing but not at the same pace across all sectors and geographies. Security of supply, affordability and competitiveness remain essential. This is why we adjusted our carbon intensity ambition to better reflect demand development and the actual pace of the transition. In this context, we are assessing CCS and geothermal opportunities selectively. These are areas where we can build on our existing strengths, especially our subsurface capabilities, project execution experience and regional position. But we will only move forward where the full value chain supports commercial viability, including technology readiness, infrastructure, regulation and customer demand. Our principle remains the same as for the rest of the portfolio. We invest where we can create value, reduce emissions in a credible way and ensure financial resilience. With this, I will hand back to Christina.

Ladies and gentlemen, as you have seen today, OMV Petrom is moving decisively from strategic ambition into execution. Neptun Deep, our broader Black Sea growth opportunities, renewable power and the SAF/HVO plant and e-mobility projects are no longer just ambitions. They have projects underway with clear milestones and disciplined schedule and cost management. Together, they are expected to deliver around 50% higher profitability by 2030. These projects are growing our integrated energy portfolio of assets, reinforcing our role in Southeast Europe's energy resilience and positioning us to capture value from the transition towards a lower carbon future. Our transformation is underpinned by a rigorous financial framework. We are allocating capital to projects with attractive returns while preserving the resilience of our traditional business and the strength of our balance sheet. As these investments progressively come on stream, we expect them to translate into stronger earnings, higher cash flows and competitive shareholder returns through 2030. This is the essence of our Strategy 2030, disciplined execution, resilient growth and sustainable value creation for our shareholders. With this, we conclude our presentation. We will take a few short to arrange the speaker setup. And after that, my colleagues and I are available to take your questions. Thank you.

Thank you for your patience, a little bit of ordering there. We thought it was nice to take questions directly in front of you. Alina, shall I hand to you.

Absolutely. Good afternoon, everyone. Let me start by introducing myself. I'm Alina Head of Consent Sustainability at OMV Petrom. We will start our Q&A session today, but just a few administrative issues before. We will be taking questions from the room, of course, but also from online. Kind request in order to be able to accommodate as many persons as possible, limit your questions to two and address them all at once, for both ones actually. And our kind request is also that we stay focused on our topic today. So Strategy 2030. All other questions will be redirected towards our Q3 webcast, which is coming up in around a month or so. And with this, I will actually go to online for inclusiveness as to start off. And maybe two combined questions with a bit of a recap on what we've heard so far. What has changed in OMV Petrom's Strategy 2030 compared to the original strategy? And what are the main factors behind these changes? And also, if you can focus a bit on the company's energy transition ambitions and its 2030 targets?

Okay. Thank you. So that will take us back to December 2021. We've had a Capital Markets Day in there. So allow me to sort of summarize the two, if that's okay. But I want to start with what hasn't changed. Ultimately, what hasn't changed is capital allocation, in terms of EUR 11 million going into the business and the dividend policy. We did in the last Capital Markets Day, update and clarify some of the dividend policy, but ultimately different policy and the capital is unchanged overall. What also is unchanged Neptun. Neptun delivers on track according to the original schedule actually back in 2021, which was even before we had FID the project. So some big pillars there. Ultimately, I would say there's two, maybe three areas where adjustments have happened, and that has been ultimately where we have seen sort of new technologies moving faster with more robust business cases in energy transition, then we have gone larger, and that ultimately is in the renewable side. We originally had a target of one gigawatt with partners. It is now 2.5 gigawatt with partners. In addition, we have added -- we balance -- originally we started with solar, then we added wind. Now we add storage. So this is the sort of what's happened on that. That is part of the capital allocation, but also because of how we do capital, because we use financing, because we use EU funding, it's a bit of a different capital mechanism that we use there. In addition, we have actually taken some capital away from technologies that not as balanced as we thought or the business case was not robust enough. That has also been on carbon capture and storage, which we still see as very important. It's just a pacing issue and what's the right time that we will see the business case for that. And with some of that capital, we have been able to allocate it to our E&P business, both actually our existing traditional business as well as you've seen the exploration opportunities that we've had to be able to do that. And actually, if you recall, maybe back in 2021, our target was 160,000 barrels of oil equivalent today by 2030. Now it's 170,000. That's excluding any portfolio activity that we might do. So I hope -- what I would want to leave you with is that we are following a strategic direction. The energy transition is moving at different paces, and we will adjust accordingly, how we do investments to make sure we get the best returns that we can for the company. And those are just some of the examples of where we have made adjustments. We have also made adjustments in our GHG targets. So we have stuck to our net-zero by operations by 2050 as an ambition. We have Scope 1 and Scope 2 target reduction of 30% that Alina talked to. And we've also said 10% in total in our overall lower carbon footprint of our overall portfolio, including sales. So that's some of the adjustments that we have made overall to that. But ultimately, I say stay the course with some adjustments that we think are pragmatic in the energy transition. And if I had a moment that I feel really proud of is that actually what was really good is that we had the options of where to put the capital when we wanted to move it away from others, we could find options for that. And I believe that is a differentiator in our sector. Thank you for the question.

Thank you. We will now move to the room show of hands. My colleague here in the back will help us with the microphone. We have someone here right in the front row. Thank you.

Helane Hill from Santander. Thank you for organizing this event. My two questions are -- the first one is about -- all across Europe, we are having this way for potential windfall taxes and price caps. If you can elaborate how your company is managing in the different businesses in gas and power, in refined products, this regulatory pressure across the portfolio. And the second question is about the -- you had this good news on the execution of Neptun Deep, but 2026 has been disappointing in terms of exploration with these two dry holes. And what do you learn from this experience? And why are you so convinced about the exploration program going forward?

Thank you. Alina, do you want to try and cover all the different divisions when it comes to wind for taxes and regulations overall, I mean, I think you're exactly right. It's -- and we don't necessarily think across of Europe, you're necessarily going to a lot of change because there's so much volatility going on. But Alina will talk to the specifics. And I think how robust we have. And you bet even after two not commercial dry house, we still have a lot of belief in Black Sea, but I'll leave Cristian to talk a bit more about that.

Thank you for the question. I will try to stay brief because if talk about regulatory intervention, it could be very long. There are many. But all in all, what is important is we are all the time in advocacy and discussion with authorities. And many times what we see in Romania is that we start from here, and we become shorter when it comes to smaller when it comes to interventions. But going into concrete, what we have seen, and I will start with refining and marketing was an intervention for Q2, and which was temporarily covering all the quarter 2. It had several levers capping the refining margins and retail margins at the level of last year. It has some intervention around excise as well. And also it had a solidarity tax which was depending on the crude price. This was the Q2. Than we had in -- or moving forward into Q3. We had July, no intervention. Then in August, we had another set of interventions which are lasting until October, slightly adjusted versus Q2, where capping is around retail and commercial margins. No capital refining margins anymore. But solidarity tax that is dependent not only on crude price but also on diesel price, which basically captures the refining margin via the solidarity tax part of it. All in all, we remain part with part of the upside. That's important in our numbers, and we will continue to have a dialogue and discussions with professional associations with authorities all the time in explaining the impact of regulatory intervention in our investments because that's all about. In the end, stability for the company investing and we are the most intensive investment period in our history. This matters a lot. It's -- our investments are always long-term investments, and these long-term investments require stability of the fiscal and regulatory regime. So it's part of our everyday's work and challenge to have this dialogue. And -- yes, coming to the results, yes, there are intervention. Very important is that these interventions are temporary are targeted, and we remain in the end with part of the upside. Moving into Gas and Power, we have seen also there, we still have until end of Q1 next year. Capping for households and district heating producers. That is valued the rest, which is around wholesalers, but also power business that is not regulated anymore. So it's reregulation from this perspective into the Gas and Power. And on E&P, we do have normal -- an addition to royalties, we have supplementary taxation, more on gas, both onshore and offshore as well. So -- yes, stability and predictability remain core essential for us going forward. And we assure you that we have this dialogue all the time with the Romanian authorities.

Yes. Talking about Bulgaria, which we are referring. Basically, we need to not forget that we're in exploration. In exploration, there are good and there's a less good. So basically, it's important to keep this in mind. We found gas there. It was not commercial. So the geology is proved. What each well is bringing to us, successful or unsuccessful is bringing data, which is helping us understand in the basin. Let's not forget that we are in the Neptun Deep at on Cheryl, we're in Hanson. So we're best positioned to understand the geology. We're as well seeing the potential on the neighboring country, what's happening in Turkey. So -- I think the data are valuable, and we're analyzing and seeing and understanding the basic. What I want also to say is that as announced in -- we are following two more exploration models in the offshore. One is Anaconda, which is a commitment well in deepwater, and as well Cormoran I think understanding the basin is the value which those wells brings to us. And one another point which I want to make to remember that on the wells in Bulgaria, our partners -- partner paid EUR 100 million for the two wells plus after that, an equal share of the well. So commercially, it was mitigated from the beginning. Thank you.

Another question from the room.

Guille Morgan Stanley. I guess my first question, of course, you're anchoring your base case scenario on $75 But I think there is a plausible case here that we continue to see straight reopening and we're closing for some time and that's sustaining higher prices for longer. How should we think about your capital allocation under that scenario? Should we think about more upside in terms of shareholder remuneration? Are there any sort of additional investments that could potentially even take your target in terms of production higher than 170% 2030? And then the second one, I was curious about your Yankee cost over the coming years. If my math is correct, even with the -- well, stripping out the effect of Neptun Deep, we also have a big reduction in terms of E&P costs in the legacy portfolio. So why I was keen to just hear more about the initiatives that can take us there.

You want to start with the cost one and then we'll come back with the capped one.

Okay. So -- it did on the cost side, if you take the average 9 that we have announced today and you take out $9 per barrel that we have mentioned today and you look at what Neptun operating cost expectation is, you end up with a cost which is lower than it is today. What we are doing, we have very significant cost and efficient programs ongoing. Programs, which cover from simplification of footprint simplification of processes, automation everything that we could imagine in dealing with our cost because this, in the end, will define our competitiveness going forward. And -- yes, we are seeing today high oil gas prices but we believe this will not be forever, and we have to be competitive on lower prices. That's why we do huge effort on cost management, also tackling all the new technologies, the data, NAI and all that. And we have very ambition plans in going down with the cost by 2030, quite a lot.

And on the -- so the capital allocation is almost the other side of that equation, right? How do you keep your costs down for when prices come down and to keep yourself competitive and then what happens when prices pop up? And really the fundamentals changing or not and for how long. Because in the end, obviously, we have a rate of return that we're looking to make sure that we achieve and it needs to pay back in a certain amount of time, and can you guarantee that. With regards to, does it change dividend? I mean, obviously, the operating cash flow goes up, so does the payout with regards to would we change the dividend policy, not at this point in time. I think the main thing for us is, does our geology and does our option set allow more things to become more economic or competitive part of the challenge was a high price also is high inflation, high fats turns into high salaries and then you get the cost inflation on the other side. So we just need to watch that we don't run away with ourselves too much on the high price having been in the industry for over 30 years. We are notorious for chasing the highest price and then why we have high cost as well. So it's just a learning after many years that you need to be careful of the spikes in price. So generally, it tends to be more of better dividends, but let's watch out for capital.

Quite a few hands on that side, I saw.

[indiscernible] Investments. Just a couple of questions for me. Once Neptun Deep reaches plateau production, how should we think about the price realized on OMV Petrom's share of gas relative to European hubs? And also, could you -- I've seen that in some of your reports, you also provided an approximate annual cash -- after-tax cash flow sensitivity for different prices of oil and gas. Could you also provide one for the change in gas prices?

So I'll go with the Neptun price. So we put a set of pricing scenarios, and you will have access to the full presentation. So for gas price, we see somewhere between 25 to 35, or maybe I should say the other way around from 35 going towards 25 towards 2030. That's how we see the gas price with 35 being just rather shorter period and then moving down towards 25. We do have a set of sensitivities that we also published in our presentation, oil price, but also gas price and our sensitivity for EUR 1 per megawatt when tools we put sensitivities for the year 2028 to 2030. This means full year of Neptun and everything else, it's EUR 50 million impact in EBIT. Thank you.

Good afternoon, and thank you for your presentation, and thank you and congratulations for the very nice execution of your strategy. My first question is regarding Neptun Deep. And given this increasing number of incidents in geopolitical, who and how is protecting Neptun Deep? The first one. And the second one is regarding your commercial strategy of Neptun Deep, we saw a very nice map of the regional gas demand, but the competition is also increasing from American and other sources of LNG. Some big Romanian players have also secured quite large volumes coming from these LNG channels. How and why is Neptun Deep more competitive? And why our neighbors would buy gas from Neptun Deep, but not from other sources?

Great questions. Maybe we start, I think, on the security. We're very much expecting that question. I spent a lot of time on it. And then why do we think Neptun Deep gas is better than U.S. LNG, Franck will have a field day telling you.

Yes, thank you for the question. What I tryind to say is that we're collaborating with all the authorities in order to secure the progress of the project. For us, it's paramount to the security of our people which are working offshore. And to remember that it's also Petromar and also Neptun Deep in this part. There are clear split according with the legislation and with the practice between the what each party needs to contribute it. Our contribution is in terms of monitoring, detection and as well supporting the response. And as well, our responsibilities are related to the operational safety field and as well operating in a safe manner, the infrastructure. And to remember as well that the infrastructure is in the exclusive economic zone area of Romania. I mean it's part of the NATO. As well that the infrastructure is a high piece of technology operated remotely, and as well that we are having field support vessel, which is in the field. Thank you.