OMV on the move in 2002. Annual Report Move & More. Highlights of 2002. January May Start of production at the The Annual Stockholders‘ Skene gas and condensate Meeting approves a divi- field in the UK sector of the dend of EUR 4.30 per share, North Sea. a stock option plan for the Executive Board and other OMV announces plans to March senior executives. invest EUR 2.7 billion in growth over the next Conclusion of purchase Rainer Wieltsch joins the three years. and supply contracts with Supervisory Board as its the Pakistani Government new Chairman. Gerhard and Sui Northern Gas Mayr is also appointed to Pipeline Limited opens the the Board. way for commercial use of the Sawan gas field in Pakistan. 01 02 03 04 05 June February OMV invests in continued Jade oil and gas field in E&P growth, acquiring the UK sector of the North stakes in three UK offshore Sea brought onstream exploration blocks. using state-of-the-art April technology. OMV opens first internatio- Fifth significant oil nal retail station in today’s discovery in Libya’s Serbia-Montenegro. Murzuk Basin since 1998 New OMV administration further increases its building inaugurated in importance to OMV as Bucharest, Romania. one of E & P’s five core regions. OMV 2002 I Highlights of 2002 September November Size of OMV’s German OMV was granted an retail network is exploration license in the doubled by the acquisition 13,110 sq km Varna-Deep of a total of 72 filling Sea Block, offshore stations in Bavaria and Bulgaria. Saxony. July OMV takes a 25.1% interest in Romania’s largest OMV was granted a gas private oil company, exploration license for the The Rompetrol Group NV, South West Miano II Block including the well-placed in southeastern Pakistan. Petromidia refinery on the Black Sea, with access to the river Danube. OMV acquires 10% of the producing Maui gas field and 49% of the Maari exploration permit, both offshore New Zealand. 06 07 08 09 10 11 12 December October Green light for Austrian August OMV becomes the first gas alliance EconGas, in Austrian company to which OMV holds 50%, to OMV farms into the officially commit itself to supply gas to business development of a the Austrian Code of customers in Austria and 140 million barrel oil field Corporate Governance. neighboring countries. in Block NC 186 in Libya. Work starts on OMV is successful bidder construction of a new in the auction of melamine plant in 36 retail stations in Lutherstadt Wittenberg, the Czech Republic. Germany. OMV wins license to explore for oil and gas in the 2,339 sq km Nawabshah Block in southeastern Pakistan. Contents. Highlights of 2002 02 At a glance 03 The OMV Group and its objectives 06 Members of the Supervisory Board 07 Report of the Supervisory Board 08 Group structure 09 Executive Board 10 Statement of the Chairman of the Executive Board 12 Corporate responsibility 13 Human resources 14 Health, safety, environment 15 Research and development 16 Corporate governance 17 Value management 18 OMV stock 20 Directors’ report: Economic climate 22 Exploration and Production 26 Refining and Marketing including petrochemicals 30 Gas 33 Chemicals Directors’ report: 36 Financial condition and results 40 Capital expenditure, assets and financial structure 42 Financing and cash flow 43 US GAAP 44 Risk management 44 Outlook Consolidated accounts according to ACC: 46 Consolidated balance sheet 48 Consolidated statement of fixed assets 50 Consolidated statement of income Notes according to ACC: 51 Consolidated statement of cash flows 52 Changes in stockholders’ equity 52 Notes 1–31 75 Auditors’ opinion 76 List of investments US GAAP: 78 Auditors’ report 79 Reconciliation of net income and stockholders’ equity 80 Notes to the reconciliation, Notes 32–42 83 Supplementary US GAAP disclosures, Notes 43–49 88 Supplementary oil and gas disclosures (Exploration and Production), Note 50, unaudited 94 Abbreviations 95 Five-year summary 96 Stockholders’ information Contacts OMV Group in figures 2002 OMV 2002 I Contents Move & More. The 2002 financial year has evidenced that even in a challenging environment, we are capable of attaining our ambitious goals by making continuous improvements across all of our business segments. We are conscious of our responsibilities, and of the importance of securing our future by achieving profitable growth. We are growing selectively and profitably through investing in the right areas of business and enforcing strict cost management. In 2002 we worked with energy and enthusiasm towards our long-term objectives without losing sight of our social and environmental responsibilities, and we will continue to do so in the coming years. We have much pleasure in sending you our Annual Report for 2002. Thank you for your confidence in our Group. Wolfgang Ruttenstorfer OMV 2002 I Move & More At a glance. in EUR 2002 2001 2000 Earnings per share 11.85 14.09 11.95 Earnings per share US GAAP 1 11.21 13.94 13.31 02 Dividend per share 2 3.50 4.30 4.30 in % Return on average capital employed (ROACE) 11 14 12 Return on fixed assets (ROfA) 16 20 16 Return on equity (ROE) 14 18 18 1 US Generally Accepted Accounting Principles 2 Proposal to the Annual General Meeting for 2002; 2001 and 2000 dividends included a bonus dividend of EUR 1.30 per share. OMV Group. Who are we? We are not only one of Austria’s largest listed industrial companies with consoli- dated sales of EUR 7.08 bn, we are also one of the leading oil and gas groups in Central and Eastern Europe. We have world-wide exploration and production activities, along with highly efficient oil and gas supply systems and an extensive retail network throughout the region, which provides us with a solid marketing platform to cater for all consumer needs, both now and in the future. In addition our integrated chemicals and plastics businesses produce melamine and geotextiles for the world market and plant nutrients for Central and Eastern Europe. We also have a 25% stake in the second largest European based producer of polyolefins, Borealis A/S, about 10% in the Hungarian oil and gas company MOL, and a 25.1% stake in The Rompetrol Group NV, Romania’s largest private oil company. What are our strengths? We have a unique geographical position and an in-depth under- standing of the Central and Eastern European markets. We have concentrated on growing our core businesses, and grow in the world-wide expanding melamine business too. Continuously increasing efficiency significantly improves our market competitiveness. We have achieved a good balance between our Refining and Marketing activities and we have enhanced the profitability of the refineries by maintaining a high degree of integration with basic petrochemical production. What are our objectives? All our competitive advantages will be utilized and we will under- take a strategy of strong organic growth in our core businesses. We will further increase overall efficiency throughout the Group by utilizing cost control systems which support profitable growth. Our financial targets over a full business cycle under normal conditions are: a ROACE of 13%, a ROfA of 16%, and a ROE of 16–18%, thus aiming to increase shareholder value and represent an attractive long-term investment. OMV 2002 I At a glance Ireland Central and Eastern Europe Great Britain Tunesia Iran Libya Pakistan Sudan Jemen 03 Australia New Zealand Objectives. The OMV Group and its objectives We aim to double the size of the Group by 2008 and achieve our return on capital employed target of 13%. • In Marketing we aim to double our market share in Central and Eastern Europe to 20% by 2008. We will increase our refining capacity in order to achieve and maintain this target market share. • We aim to double our oil and gas production to 160,000 boe/d by 2008 to achieve a portfolio balance between production in E & P and sales volumes in Marketing of 0.5 to 1. • In Gas we aim to expand our marketing and trading activities in Austria and neighboring countries, as well as to strengthen the gas hub Baumgarten. • In Chemicals we aim to double our melamine sales volumes. OMV 2002 I The OMV Group and its objectives Objectives. The OMV Group and its objectives Exploration and Production. Who are we? 46% of our total production comes from Austria, and 54% is coming from our 04 activities in Australia, Libya, New Zealand, Pakistan and the UK. We are involved as either an operator or partner in exploration and development projects in our core areas Australia, Austria, Libya, New Zealand, Pakistan and the UK, but we also pursue projects in other countries. We currently have proved reserves amounting to 343 mm boe. What are our strengths? We clearly focus our activities in core areas where we are capable of reaching critical mass. We have 72% of our production in politically and financially stable countries. The acquisition of Preussag’s international assets strengthens our position in our core regions. We possess a very high quality portfolio in the mid-size field range, as well as shares in several giant-size fields. What are our objectives? We will continue to be a niche player with a global portfolio. We will aim to increase our production of crude oil, NGL and natural gas to 160,000 boe/d until 2008 by further developing our existing fields and by acquiring selective, proven acreage in our existing core areas as well as investigating projects, e. g. in the Middle East and Russia. Gas. Who are we? We supply up to 90% of the natural gas needs of the Austrian market by drawing on supplies from Germany, Norway, Russia and on our own domestic reserves.