Sustainability Report - 2007-2008

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Sustainability Report - 2007-2008

  1. 1. Sustainability Report 2007/08“ Everything we do to achieve sustainability enhances our success.”
  2. 2. About This ReportDescription The following data are not taken into account forThis OMV Sustainability Report replaces the CSR this report:Performance Reports and HSE Reports of previous c Figures from holdings of equal or less thanyears. The print version presents key informa- 50% if there is no significant operational in-tion on OMV’s sustainability performance. Addi- fluencetional information is provided in the full-length ver- c Environmental data from filling stations, duesion of the report, available on the OMV website. to the fact that the vast majority of filling sta- tions are operated by partners functioning asThe Sustainability Report covers the business independent companies.years 2007 and 2008, in seamless continuationof the 2005-06 reporting period covered in the We work closely with our joint venture partners,last Performance Report and HSE Report. In the filling station licensees, contractors, and sup-future we plan to publish the Sustainability Re- pliers on all matters relating to sustainability.port concurrently with the OMV Annual Report. Examples of how they implement our policiesReaders of this report are welcome to get in are given in this report.touch with us and let us know what they think. ContentReporting Boundaries The information contained in this report relates toThe following data are fully taken into account: the typical impacts of an oil and gas company onc Data from all OMV activities with a stake social and environmental sustainability issues. The of more than 50%, except Kazakhstan and report takes into account recommendations from Petrom Marketing (reporting systems under stakeholder dialogues and industry associations, development) as well as disclosure demands by financial analystsc Joint ventures where controlling influence is and by the general public. The report was prepared exerted and in which OMV acts as an opera- with reference to the guidelines of the Global tor, including minority shareholdings. Reporting Initiative (GRI) and the Greenhouse GasChapter Openers4 18 26Corporate Profile In the Spotlight Environment42 66 72Social Issues and Society Outlook Indicators and Assurances
  3. 3. Protocol (GHG Protocol), a corporate accountingand reporting standard developed by the WorldBusiness Council for Sustainable Development(WBCSD) and the World Resources Institute (WRI).We self-declare this report to the A+ ApplicationLevel of the GRI. This self-declaration was checkedand approved by the GRI.Reporting MethodologyData generation at site level relies on a varietyof business-specific methods, process systems,and tools. A central reporting tool that can beaccessed from all OMV sites and offices via theOMV Intranet is used for the Group-wide collec-tion of HSE data. Standardized definitions weredeveloped for all indicators and made avail-able online. The completeness and accuracy ofreported data are checked at corporate level.Cross-checks (over time, between sites, andcomparison with normalized industry-specificdata) are performed systematically. Feedbackand commenting loops with the reporting sitesand departments ensure high data quality. If weidentify limitations in the coverage or reliabilityof data, we disclose them and introduce mea-sures to improve the reporting process. The HSE-related information in this report was reviewedby Ernst & Young. All other content not relatedto HSE was verified by Dietmar Kanatschnig,director of the Austrian Institute for SustainableDevelopment.Corporate HSE RegulationsOMV regulations for HSE management and re-porting are contained in corporate directives(HSE Policy; HSE Management System; HSEAwareness and Competency; EnvironmentalManagement; Safety Management; Investigation,Management, and Reporting of Incidents; Emer-gency and Crisis Management; Health and HealthManagement), and standards (e.g. HSE Terms andDefinitions).
  4. 4. LinksThis To help save natural resources by avoiding repe- more detailed descriptions of specific subjects orsymbol tition in our periodic reporting, this OMV Sustai- chapters of the report can be found there. A textpoints to nability Report is a combination of two previous passage on the website will be indicated by a Webadditional reporting formats, the Corporate Social Respon- symbol. The OMV Annual Report, which is pub-informa- sibility Performance Report and the HSE Report. lished concurrently with the Sustainability Report,tion on For the same reason, OMV decided to publish on focuses on performance data but also containsthe OMV its website or in its Annual Report certain subject information on the OMV organizational structure,website: matter and detailed data which must be included objectives and strategy, corporate governance, risk in comprehensive sustainability reporting in order management, and the business segments.www.omv. to meet the criteria of the A+ Application Level ofcom the GRI Reporting Guidelines. In the present report, reference is made to the OMV website whenever Organizational Structure Objectives and Strategy General information on the manage- Objectives and strategy of OMV as well ment and ownership structure of as of the operating business segments OMV and Petrom Corporate Governance Management structure of OMV, including the Statement of the Supervisory Board, compensation of the Executive Board members, and a description of the inde- pendence of the audit bodies Risk Management Description of the key risks identified and the preventive measures taken Operating Business Segments Description of the operating activities in the business segments Exploration and Production (E&P), Refining and Marketing (R&M), and Gas and Power (G&P) Financial Performance Presentation of the performance data for the 2008 reporting period in the directors’ report, consolidated financial statements, and performance indicators
  5. 5. ContentsfF* About This Report02 Foreword by the CEO04 CORPORATE PROFIlE10 Corporate Structure11 Products and Production12 Strategy and Objectives14 UN Global Compact and the OMV Code of Conduct15 Values16 OMV in Dialogue18 In THE SPOTlIGHT20 Future Mobility21 Is the World’s Oil Running Out?22 Energy Security in Europe23 A Turbulent Oil Market24 Biofuels25 OMV in Socially and Politically Sensitive Regions26 EnVIROnMEnT28 Our Approach29 Energy Management30 Climate Protection and Emission Management35 Sustainable Resource Management39 Environmental Impacts of Our Products42 SOCIAl ISSuES44 Employees48 Health50 Safety56 Human Rights61 Business Ethics62 Community Relations66 OuTlOOk68 Future Energies and Innovation72 PERFORMAnCE InDICATORS AnD ASSuRAnCES74 Performance Indicators77 GRI Content Index80 GRI Application Level Check81 Third-Party Statement82 Ernst & Young Independent Assurance Report84 Sustainability ProgrambF* Abbreviations and Definitions * fF = front FlapbF* Impressum bF = back Flap Contents | OMV Sustainability Report 2007/08 1
  6. 6. Foreword by the CEO Welcome to the Sustainability Report 2007/08. Sustainability has become a buzzword today, yet It is a pleasure for me to present the OMV this term is often understood in very different Sustainability Report 2007/08, which repre- ways. Before I come to the report itself, I would sents a milestone in OMV’s history for several like to begin by explaining what sustainability reasons: means to OMV. c This is our first-ever Sustainability Report (formerly CSR Performance Report), the result We see corporate sustainability as supported by of unstinting efforts to develop and expand our three pillars: activities in the sustainability area. c An economic pillar, i.e. profitable growth; c The new format combines the CSR Perfor- c An environmental pillar, i.e. the responsible mance Reports and HSE Reports published in use of natural resources, and the preservation of previous years. the basis for life on earth; and c The OMV Sustainability Report and the OMV c A social pillar, i.e. equitable and peaceful co- Annual Report are being published for the first existence, and ensuring the right to a decent life. time concurrently, as twin reports. “ For OMV, sustainability is not something to which we pay lip service. It’s how we manage our business. Profitable growth is inextricably linked with environmental and social responsibility. These are the elements that guarantee sustainability. Our genuine commitment to sustainability becomes all the more apparent in a challenging ” environment. In the English-speaking world, these three pillars These changes are intended to underscore a key are summed up in the phrase “people, planet, fact: Sustainability is an integral part of OMV’s profit.” Together they constitute the triple bottom business. Only the simultaneous publication of line and reflect a firm belief in the linkage be- both financial and non-financial indicators can tween the three elements. As a signatory to the give readers a fully up-to-date, complete, and UN Global Compact, we can claim to be behav- accurate picture of OMV. Thus the aim of this ing in a sustainable manner only when we take report is to provide a transparent account of our all three aspects into consideration in our deci- activities since the last CSR Performance Report. sions and activities, from our corporate strategy and values to the actions of any one of our We can all take pride in what has been achieved employees, whether they work in an exploration in this period: well, in natural gas logistics, at a refinery, or at a c Petrom made great strides in implementing its filling station. Each member of the organization modernization program, which involved a variety is called upon to make a contribution within his of investments with positive environmental and or her sphere of influence, for it is those indi- social impacts. vidual achievements which in toto pave the way c OMV established a Carbon Management func- for the long-term sustainable development of tion and set targets for the reduction of green- our business. house gas emissions. c New corporate directives on sustainability management, including a human rights matrix and a Business Ethics Directive, were approved. c OMV launched a safety program aimed at preventing road accidents, and introduced the new incident reporting and management tool “Think:Ahead CARE.”2 OMV Sustainability Report 2007/08 | Foreword by the CEO
  7. 7. All of us at OMV are distressed by the number of Nevertheless, with its solid financial structurefatal injuries that occurred during this period, the OMV is well placed to weather these new condi-majority of them the result of traffic accidents. tions. Cost-saving measures implemented earlyMy deepest sympathy goes out to the families of on now give us the flexibility required to respondthe victims. Accidents like these cannot be toler- quickly to new opportunities as they arise. I seeated. The Executive Board has instituted mea- the forecast slowdown in growth, accompaniedsures to ensure that the causes are investigated by more focused investments, as offering us aand the necessary steps taken to prevent similar chance to integrate sustainability structures evenaccidents from occurring in the future. more firmly within OMV; further promote aware- ness of sustainability issues; and accentuate theFatal accidents, several incidents in our plants, fact that social and environmental responsibilityand an oil-spill rate that remained unacceptably contributes to OMV’s successful performance.high – they all serve to remind us that we stillhave a considerable way to go on improving our Thus we want to be and to remain a profitableperformance. In light of the challenging environ- investment, a welcome guest in the countries inment, and also our understanding of sustainabil- which we operate, and a good employer.ity as an integral aspect of our activities, it is clear,however, that the development and implementa-tion of the elements of sustainability can only gohand in hand with business development, whichindeed they should foster and support.That is why each of the chapters in this reportcovering the different areas of sustainability in-cludes goals for the further implementation and Wolfgang Ruttenstorferstrengthening of sustainability at OMV. Theseare clearly summarized in the OMV Sustainabil-ity Program at the end of the report. I invite you,the reader, to let us know how you view OMV sothat with your help we can look for more ways toimprove and therefore together we can contrib-ute to sustainability at OMV.I foresee a number of challenges for sustainabil-ity in the coming year: We face a tougher market,low oil prices and weak refining margins will putpressure on results, and the battle for resourcesand market share is due to intensify. Our genuinecommitment to sustainability becomes all themore apparent when times are hard. Foreword by the CEO | OMV Sustainability Report 2007/08 3
  8. 8. THE ECONOMY AND CORPORATE SOCIAL RESPONSIBILITY“ What can a company do to weather the economic storm?” Michael Diglas, Telekom Austria
  9. 9. “Stand firm on its commitment to social responsibility.”Horacio Haag, Health, Safety, Security,and Environment, OMV
  10. 10. HUMAN RIGHTS“How does a multinational corporation earn universal respect?” Julia Hampl, university student
  11. 11. “By respecting the rights of the individual.” Daniel Jagsch, Avanti Brand Management, R&M, OMV
  12. 12. ENVIRONMENT“Why have you made environmental protection a top priority?” Michaela Obemeata, university student
  13. 13. “Since the earth’s resources are finite, we have to take responsibility now, not later.” Julian Roberts, Environment, E&P, OMV
  14. 14. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators Corporate Structure Integration of Sustainability within the Organization OMV’s Corporate Affairs & Sustainability (CA&S) “Management of Corporate Social Responsibil- Department is in charge of matters related to ity – Processes and Commitments,” based on the corporate social responsibility (CSR) and health, global social accountability standard SA8000. safety, security, and environment (HSE). When These management systems apply to all consoli- the former Corporate Affairs and HSE depart- dated holdings and non-consolidated holdings ments were merged to form CA&S in 2008, es- over which OMV exercises a controlling influ- sential responsibilities associated with the social ence. and environmental pillars of CSR were combined into one management function. CA&S reports Our joint venture partners are expected, and our directly to the CEO. Each operating business seg- contractors are required, to implement HSE and ment has a CSR manager and an HSE manager, CSR standards which are in accordance with ourOrganizational Corporate Petrom andresponsibility for Business Segmentssustainabilitythrough CSR, CEO PetromHSE, and HR:www. Homv. Corporate Corporate Human R Exploration and SE CScom Communications Resources Production Alignment Corporate Corporate Affairs Refining and Development & Sustainability Marketing HR Future Gas and Power Energy Fund HSE Global Legal CSR Solutions who report to the OMV Executive Board. The corporate directives. Our approach to sustain- Corporate Human Resources (HR) Department ability goes far beyond legal compliance. We see also deals with sustainability issues. CSR, HSE, sustainability as a process of ongoing improve- and HR are staff functions with specific respon- ment rather than as a project with a definable sibilities and processes for the coordination and conclusion. The HSE and CSR managers support implementation of social and environmental the integration of the triple bottom line approach – activities in the operating business segments. with an emphasis on the social and environmen- tal aspects – into OMV’s business activities. The Two management systems were set up to ensure business segments coordinate their HSE and sustainable value creation. In 2006, OMV intro- CSR strategies and activities with CA&S. The duced a corporate HSE management system CSR Committee, managed by CA&S, was estab- based on international environmental standards lished to provide strategic coordination across such as ISO 14001 and health and safety stan- business segments and departments. dards such as OHSAS 18001. It was followed in 2008 by the adoption of the corporate directive10 OMV Sustainability Report 2007/08 | Corporate Structure
  15. 15. Products and ProductionSustainability in the Value Chain fuels, our product range includes bitumen, oils,Over the last decade, OMV has grown to become lubricants, gas, and heating oil, as well as spe-Central Europe’s leading integrated energy group. cialty products, such as petrochemical productsWe explore, discover, and extract oil and natural and fertilizers, for our industrial customers.gas in six core regions, providing millions ofpeople with energy, heating, mobility, and every- Being a fully integrated energy group, OMVday products and services. OMV works hard to continually looks for ways to achieve synergiesimprove people’s mobility and quality of life. between the business segments and all along the value chain. For example, we produce natu-Our actions reflect our responsibility towards ral gas and then transport it, store it, and eitherpeople, towards the environment, and towards market it as gas or convert it to power or heat intechnological progress. OMV produces far more our own plants.than just fuel. Along with gasoline and diesel Oil Production Refining Products Product Pathway The value chain of OMVExploration GasolineAppraisal Gasoline mixDevelopment E&P oil production Aviation fuelProduction Diesel Combustion, Oil to energy heat & powerAbandonment Diesel mix Fuel oil extra Fuel oil Others Oil supply from market Ethylene, propylene Plastics Oil to non-energy Bitumen, coke, lubricants Lube oil Sulfur Chemicals ETBE, FAME, Renewables wooden pellets, others Gas Production Marketing & Trading Products/Services Product PathwayExplorationAppraisalDevelopment E&P gas productionProductionAbandonment Combustion, Gas to energy Gas sales heat & power Gas supply from market Gas to non-energy Fertilizer Agriculture Renewables Biogas Products und Production | OMV Sustainability Report 2007/08 11
  16. 16. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators Strategy and Objectives Group Management StrategiesThe OMV Strat- OMV operates in a challenging business environ- As a pioneering professional partner, OMV ensuresegy in detail: ment marked by volatile oil prices, major invest- sustainable value growth and acts responsibly. We ments – including measures to combat climate are committed to upholding not only economicwww.omv. change – and the need to diversify and secure energy supply. Against this background, OMV but also environmental and social values. These include environmental protection, sustainablecom has positioned itself as an integrated energy development, and ensuring the security of our group and a market leader in the European growth employees, customers, and partners. In addition, belt, and will continue to strengthen regional we support a wide range of social development energy security. projects and sponsor numerous sports activities. Three Pillars of Sustainability OMV’s sustainability policy is based on three pil- OMV has compelling ethical and economic lars: economic, environmental, and social. This reasons for integrating sustainability and social Sustainability Report focuses on the second and responsibility into its business operations. As a third pillars, while the economic pillar is covered responsible company, we seek to improve the in the Annual Report. At corporate level, it is quality of life of our employees and the commu- primarily the HSE, CSR, and HR staff functions nities in which we work; promote respect for hu- that hold responsibility for the environmental man rights; initiate and encourage dialogue with and social pillars. stakeholders; maintain high ethical standards in our own business and in general; and ensure Sustainability and social responsibility are fully secure processes to protect our employees, the enshrined in our corporate strategy and the local population, and the environment. strategies of the individual business segments. Moreover, these commitments are included in At the same time, our business faces economic the Balanced Scorecard both at corporate level and technological challenges in today’s world. and in the business segments, through measur- Competition is increasing, not only for custom- able objectives and measures along the value ers but also for exploration and production chain. licenses. OMV’s activities in regions with sensi- tive political, cultural, and social conditions can entail risks. OMV will continue to work towards the long- term security of energy supply; to confront the challenges of climate change and international climate change policy; to ensure it has a well- qualified and highly motivated workforce as the key to staying competitive; and to do all it can to meet stakeholders’ needs as well as the expecta- tions of the general public.12 OMV Sustainability Report 2007/08 | Strategy and Objectives
  17. 17. Vision GoalsCSR We manage our business responsi- CSR is an integrated part of the new OMV management style and cul- ture. Employees, customers, investors, and the general public perceiveFunctional bly and live a cul- OMV as a company that has successfully integrated CSR.Strategy ture of integrity. We achieve our goals by behaving ethically and with integrity. We know our stakeholders and seek to involve them. HSE is a natural We promote an HSE culture by demonstrating leadership and commit-HSE and integrated ment, and by improving competencies.Functional part of our activi- Health standards are fully implemented and health risks are systemati-Strategy ties. We apply cally assessed, reduced, and managed to ensure that employees are fit industry best to carry out the work assigned to them. practice, act re- Safety risks are minimized and a safe working environment is ensured sponsibly, and are for our employees and contractors. accountable for People, business, and assets are protected by appropriate risk manage- our actions. ment and implementation of global emergency and crisis preparedness. Environmental impacts, risks, and liabilities are minimized by reduc- ing emissions, discharges, and pollution as well as through better and more efficient use of natural resources. In all our HR-re- Strategy areas of aligned activities are focused on optimizing our HRHR lated activities we management systems, tools, and efficiency throughout internationalFunctional aim at position- HR operations, strengthening our employer image and attractiveness,Strategy ing ourselves as and having the right talent at the right time in the right workplace. an employer of Further major areas of strategic thrust are activating above-average choice on a truly performance and leadership, managing our corporate culture and orga- international level. nizational development across the entire OMV Group, building cross- divisional effectiveness, and thereby leveraging an integrated approach in stakeholder relations.Petrom’s CSR Strategy and ObjectivesAs an integral part of the sustainable develop- c Initiation of new projects involving communi-ment strategy, CSR must support the long-term ty dialogue to identify and respond to needs,development of Petrom. By deciding to adopt school rehabilitation, and school transporta-the OMV Values and Code of Conduct, Petrom tion.management expressed its commitment to thehigh standards of integrity at OMV. Petrom has Promote volunteering among Petrom employeestaken a systematic approach to developing a c Organization of an internal campaign to raisemanagement system aligned with that of OMV, interest in becoming a volunteerwhile ensuring compliance with international c Created the Volunteer of the Year Award handCSR standards and access to best practices. in hand with the project “The Best in Us.”Petrom’s main CSR objectives and achievementsin 2007-08 were: Build an efficient CSR network across Petrom c Nomination of a CSR responsible for eachConsolidate the company’s role model position business divisionc Continuation of projects on the environment, c Coordination of CSR efforts in order to capital- community investment, and education, e.g. ize on synergies. “Parks of the Future,” “Resources for the Future,” and “Habitat for Humanity”c Continuation of partnerships, e.g. with the Red Cross, in support of the Petrom Olympics, and others Strategy and Objectives | OMV Sustainability Report 2007/08 13
  18. 18. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators UN Global Compact and the OMV Code of Conduct The un Global Compactwww.unglobal By joining the UN Global Compact OMV madecompact.org a commitment to implementing its 10 principles on human rights, labor standards, the environ- ment, and anti-corruption. In line with the re- quirement that member companies produce an annual Communication on Progress (COP), this Sustainability Report provides an accounting of what we are doing to meet our commitment. To give the reader an overview, the relevant activi- ties described in the report are color-highlighted in the GRI Content Index (pp. 77-79). OMV endorsed the voluntary “Caring for Cli- mate” leadership platform for UN Global Compact participants in 2007, and continues to The OMV Code of Conduct actively address the problem of climate change. Our Code of Conduct applies to all OMV busi- Read more about these efforts in the “Environ- ness segments. In this central document we ment” section of this report (pp. 26-41). declare that our actions and the pursuit of our goals will be in accordance with the principles In 2008, OMV became a member of the Global of the UN Global Compact. It clearly acknowl- Compact Human Rights Working Group. The edges our corporate social and environmental chief executive of OMV helped mark the 60th an- responsibility within our sphere of influence. The niversary of the Universal Declaration of Human principles and rules of behavior set out in the Rights by signing the Global Compact’s CEO Code of Conduct are binding on our contractors Statement, which was published in the Financial as well as on OMV employees, all of whom are Times to call attention to the business communi- required to respect our standards in their daily ty’s responsibility to support human rights. OMV work. In 2003, the Code of Conduct was pub- also promoted the anniversary by enclosing lished in German and English for Group-wide an Amnesty International “passport for human distribution. In 2008, it was circulated throughout rights” with each copy of the OMV employee Petrom in Romanian. As of 2009 it is available in magazine. Urdu for use by OMV in Pakistan. Roll-out of the Code of Conduct at Petrom Petrom launched an awareness campaign entitled “The Best in Us” to explain and promote the Driv- ing Values and the Code of Conduct through con- sultations with key stakeholders, i.e. managers, the human resources community, and unions. Internal coaches were recruited from all Petrom divisions to conduct 44 workshops during 2008. More than 1,000 employees from all Petrom divisions had a chance to discuss how the Values and the Code of Conduct help them achieve their objectives. Partici- pants sharing best practices included white-collar employees from Petrom headquarters and from the field. Further information about “The Best in Us” can be found on the OMV website.14 OMV Sustainability Report 2007/08 | UN Global Compact and the OMV Code of Conduct
  19. 19. ValuesDriving ValuesIn 2007-08, OMV redefined its corporate values to create an ongoing basis for action which is in-tended to serve as a source of both motivation and guidance. The results of extensive surveys andother input from internal and external stakeholders led to the adoption of a trio of driving values:Pioneers, Professionals, Partners. (The process is described on the OMV website.) The OMV Valueswere introduced to employees in the course of 2008, and from 2009 they will be integrated into thework environment under the motto “living the Values.”PioneersOMV has played a pioneering role in promoting When national laws fall short ofcorporate social responsibility and sustainability OMV’s policies on human rights,in Austria and in the numerous other countries in OMV will abide by its own stan-which it is active. We were among the first Aus- dards provided they do not violatetrian companies to sign the UN Global Compact the laws of the country. We arewith its 10 principles regarding human rights, well on the way to systematicallylabor standards, the environment, and anti-cor- integrating CSR and sustainabilityruption. We were also one of the first to regularly goals into all areas of our business,publish sustainability reports. In socially and as shown by the inclusion of keypolitically sensitive regions we aim to set high sustainability issues in our corpo-standards for the protection of human rights. rate directives and strategy.ProfessionalsAs professionals we are committed to fully inte- and safety standards. Supportinggrating social and environmental awareness into employee development is extreme-our decision-making processes and management ly important to OMV because wesystems. To achieve this, OMV adheres to interna- want to be an employer of choice.tional standards and examples of best businesspractices. We monitor and assess the potential With regard to its social responsi-impacts, both direct and indirect, of our business bility, OMV continuously strives toactivities on the local environment and commu- increase its contribution to society.nity, and look for solutions to mitigate them. Inour relationship with our employees, professionalmanagement ensures high occupational healthPartnersWe strive to be a partner to all the interest with benefits for both sides. Be-groups affected by our activities. We maintain cause OMV is active in so manyan ongoing and respectful dialogue with stake- different countries, the stake-holders. We talk to individuals and civil society holders are widely diverse. OMVorganizations to find out what their concerns, routinely organizes events forneeds, and expectations are. stakeholders wherever it oper- ates.At the same time we explain our views and ourperformance in the area of sustainability. Thegoal is to create mutual understanding leadingto trust and cooperation on a partnership basis, Values | OMV Sustainability Report 2007/08 15
  20. 20. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators OMV in Dialogue Stakeholder Forum In October 2008, the OMV Stakeholder Forum, important external stakeholders offered were a which has become a key part of OMV’s dialogue valuable addition, and also served as a counter- with various interest groups, took place for the point to the presentations by OMV representa- third time since 2006. At the event, which was tives Simone Alaya, Dorothea Sulzbacher, and held in Vienna, over 70 people participated in a Rosa Zehner on human rights and the challenges lively discussion with the OMV Executive Board. posed by the European Union’s post-Kyoto The goal of the 2008 Forum was to en- regime. The senior vice president of OMV’s new hance dialogue with stakeholders by giv- Corporate Affairs & Sustainability Department ing them a better opportunity to express (CA&S), Hilmar Kroat-Reder, began by discuss- their views and expectations directly to ing the importance of sustainability management the company. Christian March, head of as an integral aspect of OMV’s business activi- Amnesty International Austria, spoke ties, and went on to describe its implementation about human rights, and Ingmar Höbarth, in the OMV Group. As at the previous Stake- head of the Austrian Climate and Energy holder Forum in 2007, the participants in the Fund (KLIEN), described the challenges of 2008 event took a lively interest in the discussion climate change. In their talks, the speak- and brought up a number of relevant, at times ers examined OMV’s performance in the controversial issues. These issues are addressed two areas. These perspectives which the in the “In the Spotlight” section of this report.Claudia Saller,network Social Expert GroupsResponsibility OMV representatives are active members of the In 2009, IPIECA’s Social Responsibility Working working groups of the International Petroleum Group will issue an overview document for the oil Industry Environmental Conservation Association and gas industry on issues affecting indigenous (IPIECA). IPIECA aims to develop and promote peoples. It aims to help inform and guide com- scientifically sound, cost-effective, practical, and pany interactions in situations where indigenous socially and economically acceptable solutions to communities are or may become involved. The global environmental and social issues pertaining document will look at a range of complex and to the oil and gas industry. IPIECA is not a lobbying diverse issues across the globe, examining the organization, but provides a forum for encouraging international and national legal frameworks, continuous improvement of industry performance outlining different companies’ approaches inSelected list of in areas such as biodiversity, climate change, and their relations with indigenous communities, andOMV member- social responsibility. IPIECA regularly issues guid- identifying possible future trends and challenges.ships: ance documents for the oil and gas industry and OMV contributed a case study from OMV New other publications. In 2008, it published a booklet on Zealand.www.omv. human rights and ethics in the oil and gas industry, which includes a description of OMV’s community OMV is also a member of the International As-com development program in Pakistan. sociation of Oil & Gas Producers (OGP). Local Stakeholder Dialogues Romania with different stakeholder groups. Petrom repre- As preparation for productive stakeholder dia- sentatives took part in numerous other CSR- logue, several management training workshops related events as well. to raise awareness of CSR and stakeholder en- gagement were organized at Petrom in 2007-08. new Zealand During the implementation of social projects, Recognition of and consultation over indigenous Petrom representatives held over 100 meetings rights is a key pillar of all OMV’s business activi-16 OMV Sustainability Report 2007/08 | OMV in Dialogue
  21. 21. ties in New Zealand. This is both a societalexpectation and a legal requirement. Ongoingstakeholder communication was undertaken withMaori groups that had a significant interest inOMV’s Maari oilfield development. The approachtaken by Exploration and Production (E&P) wasto seek professional advice on the engagementand consultation process, and to become famil-iar with Maori customs and history in its area ofoperations.AustriaOpen House for Natural Gas Station Neighbors:Every year an OMV gas compressor stationopens its doors to the public so that people liv-ing in the area can see how it operates and learnabout the logistics activities of Gas and Power.The 2008 open house was held at the compressor New Gas Compressor Station in Neustift and Visitors touringstation in Kirchberg am Wagram. Oberkappel: The project to build a compressor the kirchberg am station in Neustift and Oberkappel is an exem- Wagram com-New Gas Compressor Station in Weitendorf: plary case of timely stakeholder dialogue. By pressor stationSome members of the local community were establishing communication with local stake- during the 2008initially opposed to the idea of having a com- holders on a partnership basis early on in the open housepressor station built in Weitendorf. In addition, project, OMV was able to address their concernsan environmental impact assessment (EIA) was right from the start.required for the project. OMV therefore begana dialogue process with various stakeholder At the beginning of the planning stage, OMV madegroups: a deliberate effort to involve those local inhabi-c Municipalities and local residents tants who were recognized parties to the authorityc Mayors and town council members proceedings, and the other residents who wouldc Property owners, local fire department mem- theoretically be affected by the construction bers, hunters, etc. project. OMV held similarly intensive discussionsc Regional and national media representatives with the town as the authority, with the fire depart-c Local, district, and provincial politicians ment, and with the tourist office. OMV presentedc District and provincial authorities and environ- its plans for the project and their technical imple- mental commissions. mentation at a series of public discussions. The local citizens took advantage of the opportunity toDue to the delayed inclusion of the local popu- raise their objections, of which there were many.lation – the EIA process had already begun – a At the residents’ suggestion, an expert simulatedgreat deal of communication and persuasion the height of the facility and potential noise emis-had to be accomplished in a short period of time sion levels. As the result of these discussions, overin order to move from reaction to action. Civic the next few months agreement was reached onparticipation was much more intensive than is 19 subjects of dispute. For example, OMV agreedforeseen in an EIA process, which ultimately led not to build gas turbines but to use new, emission- More aboutto constructive cooperation with all the stake- free electric motors instead. OMV stakeholderholders. OMV is confident that it can maintain dialogue:a good and consensus-based dialogue in the The compressor station project is still underway, www.upcoming construction stages, as well as for thefollow-up project to build a waste heat recovery and OMV is continuing its efforts to find satis- factory solutions to resolve the three remaining omv.system in Weitendorf. issues of community concern. com OMV in Dialogue | OMV Sustainability Report 2007/08 17
  22. 22. IN THE SPOTLIGHT“Who will make sure that there’s enough energy for everyone by the time I grow up?” Max Daichendt, aged 5
  23. 23. “That’s exactly what we’re working on today.” Ashiq Hussain, Exploration & Reservoir Management, E&P, OMV
  24. 24. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators Future Mobility We Are All Mobile How Will We Remain Mobile?More about the Mobility is a sign of our times. Never before Turbulent markets and dynamic changes inOMV Mobility have so many people covered so many kilome- society make it difficult to predict developmentsForum: ters. And the forecast is for further growth. Being in social mobility with any kind of reliability.www. mobile is an essential aspect of our daily lives The issue is complex and the possible scenariosomv. and a cherished value. range from optimistic to more pessimistic. Whatcom Indeed, highly developed societies cannot func- is certain is that radical changes in mobility are already occurring. The energy industry, for ex- tion if people, goods, and information are not ample, is undertaking substantial economic and mobile. Because mobility gives us flexibility, technological efforts to switch from fossil fuels freedom, and the ability to be fully involved in to regenerative energy. business and society, it plays a vital role in our quality of life. New fuels and drive technologies, such as natural gas, hybrids, hydrogen, and fuel cells, Mobility is inextricably linked to time, space, are becoming attractive alternatives to conven- energy, community, communication, lifestyle, tional gas and diesel engines. With the advent environment, economy, and society. We face of telematics in traffic systems, the use of smart far-reaching challenges in connection with the technologies is spreading as well. Nevertheless, rising global demand for energy, higher trans- only a broad-based cluster of technical, econom- portation costs, more flexible patterns in work, ic, political, and social innovations will ultimately time, and use of space, demographic changes lead to sustainable mobility. and an aging society, and the pervasive use of digital technologies in traffic and communication In Times like These: Move & More systems. Mobility is a core concern for OMV. And OMV sets priorities by making fuels more eco-friendly These trends present challenges not least because to reduce the impacts of mobility on health and traffic and mobility are the greatest sources of the environment. OMV will continue on the way CO2 emissions. In the European Union, the forward by replacing classic petroleum products transport sector’s share in greenhouse gas with sustainably produced substitution products emissions has steadily grown over the past two of high technological quality. decades to around one-quarter today. The sec- tor also accounts for over two-thirds of EU oil consumption. OMV Mobility Forum Together with the OMV Future Energy Fund, the Refining and Marketing business segment commemorated World Environ- ment Day on June 5, 2008, by holding a discussion forum on the future of individual mobility. The focus was on a question that had been raised at the 2007 OMV Stakeholder Forum: How can mobility be designed to become as sustainable as possible? Experts in the field presented future trends and the technological developments on the horizon. The forecast is that the future of individual mobility will be determined by innovative drive sys- tem technologies. Thus technical progress will lead to more ef- ficient and environmentally friendly mobility behavior, but there will also be changes in the mobility mix, with public transporta- tion, cycling, and walking gaining an increasing share.20 OMV Sustainability Report 2007/08 | Future Mobility
  25. 25. Is the World’s Oil Running Out?Petroleum has been the most important primary According to the BP Statistical Review, theenergy source in the world’s supply for over 40 proven oil reserves at the end of 2007 were 1,238years. Oil currently meets 34% of global pri- billion barrels, or 169 billion tonnes. Current IEAmary energy demand, and in the transportation estimates assume that conventional oil reservessector petroleum products meet 94% of final account for another 1,200 billion barrels. In addi-energy demand. In its World Energy Outlook for tion, there are other sources of unconventional2007-30, the International Energy Agency (IEA) petroleum (oil sands, extra heavy oil, oil shales),predicts that oil consumption will grow by 1% amounting to around 2,000 billion barrels, whichannually. If this is the case, demand will rise by have hardly been developed. However, the25% from 85.2 million barrels per day in 2007 exploration and development costs are consid-to 106.4 million barrels in 2030. These growth erably higher than for conventional deposits.prospects and highly volatile oil prices increas- On average worldwide, only around 35% of theingly lead to debate over issues of availability oil in a field is currently extracted, with 65%and reserves-to-production ratios, and our remaining in the ground. If enhanced recoverydependence on them. techniques are used in mature reservoirs (inject- ing steam, CO2, polymers, etc.), oil extractionWhat is undisputed is that the crude oil deposits can be substantially increased. In the North Sea,in the earth’s crust are limited due to their forma- for example, it will reach around 50% by 2010.tion and the geological conditions required. But At a global level, an increase of 1%, based onopinions differ as to when the last drop of oil will conventional reserves, is roughly equivalent tobe extracted or when oil production will peak. the annual crude oil consumption figure. OMV’s great efforts to significantly increase yields fromPessimistic scenarios have predicted the end mature reservoirs have proved highly success-of oil reserves and the passing of peak annual ful, particularly in Romania, Austria, and Libya.oil production many times in the past. Such Whenever we increase the oil recovery factorprojections assume peak oil in the near future, by 1%, our reserve base grows, for example bybut usually only take conventional crude oil ~200 million barrels in Romania, and by ~20 mil-and proven reserves into consideration. In ad- lion barrels in Austria.dition, they frequently compare only the newdiscoveries in a given year with the annual Oil reserves are not likely to run out in the nearproduction. Optimistic predictions are based on future. By the middle of the 21st century, oil willthe assumption that vast oil resources are still no longer be the sole dominating primary sourceavailable and oil will be able to meet a major of energy in the world’s supply. There will be apart of global energy demand over the coming much broader energy mix, and renewables indecades. particular will play a key role in supplying us with energy. If we look only at the reserves-to-Both pessimistic and optimistic scenarios paint production ratio, we find that it has risen froman incomplete picture of the real situation. 31 to 43 years over the past four decades. TheRealistic evaluations take into account the fact actual availability of oil cannot be reliably gaugedthat the figures for reserves are not based on in years. Nevertheless, we can legitimately assumeexact calculations. They are taken from esti- that oil will be available for many decades tomates using methods that are no longer up to come and, as other technologies are developed,date and are currently being revised. As a result, reserves will last for at least 100 years.a distinction should always be drawn betweenproven, probable, and possible reserves. Allthese reserve categories vary depending on thesource, and are affected by anticipated prices inthe future and assumptions regarding progressin exploration and production technology. Is the World’s Oil Running Out? | OMV Sustainability Report 2007/08 21
  26. 26. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators Energy Security in Europe In the European Union today, 500 million people c Making the best use of the EU’s indigenous in 27 countries want to be able to rely on a secure, energy resources. affordable, and eco-friendly energy supply. Sup- ply security is therefore one of the cornerstones These long-term priorities should secure Europe’s of the European energy system, together with energy supplies to an even greater extent. cost efficiency and sustainability. OMV’s Contribution The greatest challenges in the global energy mar- OMV is playing its part by planning a range of ket are constantly rising demand, stiff competition investments. With its commitment to locating for resources, significant price fluctuations, and and developing new hydrocarbon reserves in its temporary supply disruptions. Current trend sce- core regions, as well as to the ongoing expan- narios show that energy production in the EU will sion and improvement of oil and gas production, drop 15-20% by 2020. Even if energy consumption OMV will help strengthen Europe’s supply base grows only moderately, import demand could in- for many decades to come. crease by up to one-third and import dependence could rise to up to 66%. As a result, energy policy Developing the transport infrastructure for oil is increasingly focusing on the issue of supply and gas is critical both for the single European security. market and for cooperation with the EU’s neigh- bors (Russia, Ukraine, Norway, the Balkan states, Eu Measures Turkey, and North Africa). For OMV and its part- The current goals in the EU’s energy and climate ners in the Nabucco consortium, the pipeline link change package for 2020 are aimed at securing to the large gas reserves in the Caspian states Europe’s future energy supply. The new Energy and the Middle East is a key project for ensuring Security and Solidarity Action Plan identifies five Europe’s gas supply, which will be considerably long-term priorities: strengthened by the resulting diversification of c Investing primarily in energy infrastructure supplier countries and pipelines. Projects for and diversification of energy supplies supplying liquefied natural gas (LNG), storing c Rooting the energy issue more firmly in the natural gas, and generating power efficiently EU’s foreign policy will further increase the flexibility and stability of c Increasing oil and gas stocks and enhancing pipeline energy supply. crisis response mechanisms c Further improving energy efficiency Current and planned activities also focus on modernizing and expanding the refineries to turn them into energy centers. In the future, not only will they produce petroleum and chemical and petrochemical products, but they will also be able to generate heat and electricity at high ef- ficiency to meet internal and external demand. At the same time, the OMV Future Energy Fund is working to add renewable energy to OMV’s portfolio, which will contribute to the expansion and integration of the value chain.22 OMV Sustainability Report 2007/08 | Energy Security in Europe
  27. 27. A Turbulent Oil MarketDevelopments in the fuel sector have attractedconsiderable attention in the Austrian mediaover the past two years. There were two mainreasons: first, the fluctuations in the price ofcrude oil, which skyrocketed to a record levelof around USD 145 per barrel for Brent on theinternational commodity exchanges; and second,intense price competition at Austrian filling sta-tions.From 2007 through the first half of 2008, interna-tional trends in crude oil and petroleum productprices reflected expectations of rising demand,especially in China and India, as well as theuncertainty surrounding future crude oil produc-tion capacities and the geopolitical situationin some of the oil-producing countries such asRussia and several OPEC member states. Theseassumptions underpinned decisions by financialinvestors that strongly influenced the markets.The relatively weak US dollar helped keep crude claimed in the media, was examined in a studyoil prices high. by the Austrian Competition Authority based on the average price in the first half of 2008 and inThe second half of 2008 saw a remarkable fall previous years during a period of high prices.in crude oil and petroleum product prices to Market prices for crude oil and oil productsbelow USD 50 per barrel. Given the shortage of change so fast, however, that the results ofcapital due to lack of confidence in the financial the study can probably be seen as momentumand business sector, and partial reductions in without predictive accuracy with regard to futuredemand, the global financial crisis led to a sharp developments.drop in oil prices on the international commodityexchanges. Finally, it is worth pointing out that the oil price turbulence in Austria should not be seen inAustria is also subject to these global competi- isolation. Transparent pricing and generally hightive forces. Competition in the domestic fuel market transparency, in particular for oil productsector is stiff. Although now and again collusive prices, are a feature of the Austrian filling stationbehavior in an oligopolistic market is suspected, market, which means that prices can be com-no statistical proof has been found. Instead, price pared and adjusted locally. Yet price compari-adjustments in Austria tend to follow interna- sons can be misleading both for consumers andtional trends, especially for diesel and gas. Prices for filling station operators. International priceat Austrian filling stations are adjusted either fluctuations must be reckoned with in turbulentup or down according to the situation on the times. Fixed price reductions in regional marketsinternational exchanges, such as the commodi- are not justifiable.ties exchange in Rotterdam, and also in responseto regional competition. The latter is affected by By Johannes Benigni, energy expert and Manag-the geographical location of the filling stations, ing Director, JBC Energy GmbH, Viennanational fiscal legislation for petroleum products,and other factors.The question of whether greater delays in adjust-ing prices are at the consumer’s expense, as A Turbulent Oil Market | OMV Sustainability Report 2007/08 23
  28. 28. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators BiofuelsRead about OMV’s The European Union set itself an ambitious effect in the member states in 2010 will the sus-current research target in Directive 2003/30/EC of the European tainability requirements be extended to importson biofuels on pp. Parliament and the European Council “on from non-EU countries. OMV has therefore set68-71 and at: the promotion of the use of biofuels or other its own standards for purchasing biofuels, based www. renewable fuels for transport”: 5.75% of all in part on discussions with non-governmental omv. gas and diesel fuels placed on member states’ organizations. In 2008, OMV implemented these com markets should be replaced with biofuels by December 31, 2010. Some member states, such standards step by step in Austria and Germany, with the ultimate aim of applying them to all as Germany and Austria, have undertaken to OMV markets. meet this target even sooner. Since the term “biofuels” is used in all EU laws and directives, As of 2009, OMV will require that its suppliers OMV also uses it, while acknowledging the fact comply with the following contractual require- that agrofuels or renewables would be more ments concerning the purchase of biofuels (etha- appropriate. nol and biodiesel): c Raw materials for producing biofuels should When raw materials are of European origin, their preferably come from Europe and must not sustainability is regulated by the legal require- directly contribute to rainforest clearance. ments of the EU’s Common Agricultural Policy. c The raw materials used must be free of ge- The sustainability of imports from non-EU coun- netically modified organisms (GMOs). tries, be it raw materials or biofuels, is not gov- c Residual materials, such as used cooking oil erned by those guidelines. Not until the directive and animal fats, may and should be used, on energy from renewable sources comes into within the limits of our procurement specifi- cations, as raw materials for OMV biodiesel. c OMV must be notified of the raw material mix for all biofuel deliveries. c A means of transport with the lowest environ- mental impact possible, such as ship or rail, should be used for transporting raw materi- als for biofuels in general, and for conveying biofuels to our storage facilities. c Biofuels supplied to OMV must be superior to fossil fuels in their life cycle assessment. In the future OMV will continue to build on these high standards for the procurement of biofuels. Moreover, we will push for the raw material base to be gradually altered to include next-generation raw materials, i.e. cellulose and residual materials. If for economic, com- petitive, or procurement reasons we cannot maintain or extend the standards we have set ourselves, the public will be informed accord- ingly.24 OMV Sustainability Report 2007/08 | Biofuels
  29. 29. OMV in Socially and Politically Sensitive RegionsOMV is fully aware of its social responsibility in fulfill, and support the fulfillment of internation-its international activities. Our aim as a company ally recognized human rights, and we undertakethat operates in many different countries around to verify that wherever we are active, no humanthe world is to achieve our business objectives in rights violations are occurring from which weline with our environmental and social responsi- knowingly benefit. Consequently, human rights-bilities. Therefore, OMV committed itself in 2003 related issues are included in our due diligenceto upholding a code of conduct that specifically process as well as in other decision-makingaddresses these issues. The OMV Code of Con- processes. In the interests of systematic imple-duct is based on the universal values enshrined mentation across the Group, OMV undertookin the UN Global Compact, and on today’s a participatory process with the operatinginternational understanding of the responsibil- business segments to develop an instrumentity which businesses have in regard to human that facilitates close examination of humanrights. We want to make an impact and will thus rights-related issues whenever OMV preparesdo everything possible to afford special protec- to engage in new activities. This involves tak-tion to people and their rights. ing into consideration human rights reports by internationally recognized non-governmentalOMV is active in more than 25 countries. Some of organizations. Moreover, we ourselves evaluatethese countries are socially and politically sensi- potential human rights-related risks which ourtive. OMV cannot engage in political activity either activities in a new country or region, or our par-at national or international level, nor does it seek ticipation in a new joint venture, could entail.to do so. We draw a clear distinction between the We also consult independent human rights ex-general policies of a country and of its political perts as needed. The issues which demand par- Business OMV’s sphere Company Partners Contractors Community Society of influencerepresentatives, and our responsibility for human ticular attention are security provision by armedrights as understood under current international security forces in harmony with human rights,human rights law. This means that we bear the prevention of systematic human rightsresponsibility for the people in our sphere of influ- abuses, and fair treatment by joint partners ofence. We take this social responsibility seriously their employees, and many others as well. Forand view corporate social responsibility as a example, the instrument was used in connec-management tool: For us it is the understanding tion with our planned activities in Turkey inof how we conduct our business. It requires us to 2008 (see “Challenges and Goals in 2009” in thetake into account the environmental, social, and chapter on “Human Rights,” p. 60), and the aimeconomic aspects of our business in every deci- is to apply it throughout OMV in 2009.sion we make and in all our activities.Based on the Human Rights Policy adopted in2007, OMV’s human rights responsibilities with-in its sphere of influence were defined in theOMV Human Rights Matrix in 2008: We respect, OMV in Socially and Politically Sensitive Regions | OMV Sustainability Report 2007/08 25
  30. 30. ENVIRONMENT“Why should an oil and gas company be concerned about climate change?” Karla Sophia Zehner, high school student
  31. 31. “Because we want to preserve natural resources for future generations.” Rosa Zehner, Carbon Management, OMV
  32. 32. Corporate Profile | In the Spotlight | Environment | Social Issues | Outlook | Indicators Our Approach Policy and GuidelinesThe OMV HSE Environmental management at OMV is based onPolicy: a precautionary approach and proactive man- agement aimed at minimizing environmental im-www.omv. pacts. Climate protection measures at productioncom sites, the quality of OMV products, and support for alternative energy sources all play a key role. Group-wide requirements for environmental management processes are defined in the En- vironmental Management Directive. It links the high-level principals set out in the OMV Policy on Health, Safety, Security, and Environment (HSE), in other directives, and in our commitment to the UN Global Compact, with implementation at the operational level. To ensure the integration of Organizational Responsibility environmental management processes in the core Environmental issues are managed vertically and business, the directive is linked to other business horizontally across the whole organization. They processes such as investments, strategy develop- are taken into account at specific stages in the ment, planning, budgeting, and purchasing. De- decision-making processes at corporate level as tailed environmental standards are defined at the well as in the different businesses. Line manage- level of business segments and sites, according to ment receives advice on environmental matters the specifics of the respective business activities. from its respective HSE advisors and experts. Objectives and Performance in 2007-08 The Corporate Carbon Management function The harmonization of a Group-wide directive for was created in 2007 to tackle the challenges environmental management at all OMV opera- of climate change and climate policies. This tions, including acquisitions, divestment, and in- is a cross-functional team of environmental vestment programs, set the basis for benchmark- managers, strategy and business development ing environmental Key Performance Indicators experts, and members of technical and produc- (KPIs). Due to the overwhelming importance of tion departments. They come from all OMV business segments and the OMV Future Energy Fund. Their work is coordinated by the Corpo-Objectives in 2007-08 Imple- On- rate Carbon Manager from the Corporate HSE mented going Department.Strengthen the HSE management system and moni-tor the path towards 1st quartile environmental per- l Monitoring and Further Developmentformance in defined industry KPIs On the corporate level, the monitoring of envi-Manage the GHG intensity of the portfolio and define l ronmental KPIs is embedded in standardizeda strategic sustainability path reporting processes on an annual and monthlySeek new business opportunities in the renewable basis. Annual targets are set in the Corporateenergy field which can be integrated into OMV’s core l Balanced Scorecard and deployed to the busi-business ness segments. All OMV contractors and suppliers must comply climate change, the greenhouse gas (GHG) inten- with the OMV Code of Conduct and its commit- sity of OMV products is measured systematically ment to environmental protection. This principle and provides crucial information that contributes is in the process of being rolled out at Petrom as to the development of a strategic sustainability well. path and a specific carbon strategy.28 OMV Sustainability Report 2007/08 | Our Approach
  33. 33. Energy ManagementEnergy Consumption to improve overall efficiency. E&P will work toThe integration of Petrom nearly doubled the total achieve ongoing incremental improvementsenergy consumption of OMV, which rose to 165.4 PJ through a targeted process of upgrades andin 2008 (2007: 159.5 PJ). Purchased energy such operational measures.as electricity and heat accounted for only 5% oftotal energy consumption. As a result, indirect Flaring and Venting left: Groupenergy consumption is not assessed regularly. Flaring is the burning of natural gas and venting energy intake by is its release into the atmosphere. Both processes primary energyCogeneration is important, especially for OMV waste a valuable clean energy resource and result sources in 2008refineries. More than 50% of the demand for elec- in emissions of greenhouse gases (GHGs). The Right: Totaltricity in the refining division is produced inside HSE strategy of E&P foresees the minimization energy consump-the refineries. 100% of this electricity production of GHGs and emissions throughout E&P opera- tion per businessis cogeneration. tions. This includes the elimination of continuous segment 120 Petajoule 100 80 60 Natural Gas 40 Residual Gas Liquid Fuels 20 FCC Coke 0 Electricity and District Heating E&P R&M G&P Others 2004 2005 2006 2007 2008Energy Efficiency and routine flaring and venting of hydrocarbonsImproved energy efficiency is a core interest in all from existing facilities after 2010, unless there arebusiness segments. The last few decades have no feasible alternatives. A design philosophy ofseen substantial progress achieved at Austrian zero continuous and routine flaring and venting ofand German sites, focusing on thermal integra- hydrocarbons is in place for new plants and proj-tion, heat recovery, process optimization, etc. New ects. E&P developed a new global environmentalprojects and ventures are starting at high levels of standard as part of its ongoing commitment toefficiency. At Petrom, the ongoing modernization improved environmental performance. Althoughprojects, involving a total investment of around not a member, E&P has adopted the principlesEUR 3 billion between 2005 and 2010, will lead to set out by the World Bank-led Global Gas Flaringsignificant energy efficiency improvements. Reduction Partnership for its own management of flaring and venting activities. Some flaring ofIn 2008, the Exploration and Production (E&P) associated gas has occurred in our operations in Further informa-business segment started on a comprehensive Pakistan, Yemen, and Kazakhstan as we move from tion and caseprogram aimed at improving energy efficiency temporary production facilities to permanent ones, studies:across all operated ventures. It includes develop- where all associated gas will be injected. Flaring is www.ment of venture-specific energy efficiency plans, also used during well tests, for the safe disposal of omv.benchmarking against peers and against otherOMV facilities, and finding engineering solutions small amounts of residual gas in sour gas treat- ment processes, and in emergency flares. com Energy Management | OMV Sustainability Report 2007/08 29

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