OMV aims to be a global leader in sustainable materials and energy

Narrative-Based Investing for OMV Stock

1. Current Business (Present Narrative):

OMV is a vertically integrated energy and chemicals company based in Austria, with operations in exploration, production, refining, and chemicals. It has three main business segments:

• Energy: Exploration and production of oil and natural gas, with a growing focus on low-carbon solutions and renewable energy.

• Fuels & Feedstock: Operation of refineries producing fuels and chemical feedstock, with increasing emphasis on renewable fuels.

• Chemicals & Materials: Production of polyolefins and advanced materials, with a focus on sustainability and recycling through subsidiaries like Borealis.

Strengths:

• Strong presence in Europe and partnerships in Asia and the Middle East (e.g., Borealis and Borouge).

• Long-term investments in renewable energy, sustainable materials, and circular economy initiatives.

• Solid financial performance, with a growing focus on cost efficiency and high-margin products.

2. Future Business (5–10 Year Outlook):

1. Energy Transition:

• OMV aims to become a net-zero company by 2050, reducing Scope 1, 2, and 3 emissions significantly by 2030.

• It plans to expand its portfolio in renewable energy (geothermal, hydrogen) and low-carbon technologies like Carbon Capture and Storage (CCS).

2. Chemicals & Materials Growth:

• Expected to become OMV’s primary growth driver.

• Target: Produce 2 million tons of sustainable products annually by 2030.

• Expansion in high-growth markets like Asia and North America, driven by demand for polyolefins and advanced recycling technologies.

3. Fuels & Feedstock Transformation:

• Shift from fossil-based fuels to renewable fuels and sustainable feedstock.

• Reduction in traditional refining throughput and increased production of biofuels and synthetic fuels.

4. Global Positioning:

• Strengthening its role as a leader in sustainable materials and renewable energy solutions.

• Leveraging partnerships (e.g., ADNOC) to enhance access to high-growth markets and technologies.

Key Risks:

• Dependence on volatile oil and gas prices, especially in the short term.

• Regulatory risks related to decarbonization mandates.

• Execution risks for large-scale transformation projects.

3. Investment Thesis:

• Why Buy?:

• OMV’s transformation aligns with global trends toward sustainability and decarbonization, positioning it as a leader in green energy and sustainable materials.

• Strong market presence, diversified portfolio, and partnerships in high-growth regions provide resilience and growth potential.

• Commitment to dividends and shareholder value, supported by a solid financial base.

• Why Avoid?:

• Transition risks: Large-scale shifts in the energy sector could strain OMV’s capital and execution capabilities.

• Short-term reliance on fossil fuels may face regulatory and market challenges.

4. Conclusion:

Narrative: OMV is evolving from a traditional oil and gas company into a global leader in sustainable energy and materials. Its investments in circular economy solutions and renewable technologies align with long-term market trends. If the company executes its strategy effectively, it could offer significant growth potential over the next 5–10 years.