Today competitiveness = right investment in the past 4th EU Refining Forum Brussels 11 December 2014 50% FLEXIBILITY 50% SPEED 100% MOL BUBI Central Eastern Europe Population Total petroleum products consumption il European Union CEE of o 2012 (TOE) 30,000.0 POLAND 25,000.0 tonnes 20,000.0 16% 15,000.0 10,000.0 Population 5,000.0 equivalent 0.0 38 Thousand 84% CZECH REPUBLIC 10 SLOVAKIA CEE 11% 5,4 8,4 HUNGARY AUSTRIA 10 20 EU 28 89% 2 SLOVENIA CROATIA ROMANIA 3,8 4,2 9.4 7 BULGARIA 3 Operating Environment in CEE in 2004 MOL Group Refineries BRATISLAVA SCHWECHAT Capacity: 6.1 mtpa Gdansk Capacity: 9.8 mtpa NCI: 11.5 NCI: 6.2 DUNA ARPECHIM Capacity: 8.1 mtpa Capacity: 3.5 mtpa Plock NCI: 10.6 NCI: 7.3 SISAK PETROBRAZI Capacity: 2.2 mtpa Capacity: 4.5 mtpa Litvinov NCI: 6.1 NCI: 7.3 Kralupy RIJEKA PLOCK Capacity: 4.5 mtpa Capacity: 13.8 mtpa NCI: 5.8 NCI: 9.4 Schwechat GDANSK Bratislava Capacity: 6.0 mtpa Onesti NCI: 11.8 KRALUPY Danube Capacity: 5.4 mtpa Novi Sad Petrotel NCI: 7.5 Rompetrol Sisak Pancevo LITVINOV Petrobrazi Arpechim Capacity: 3.3 mtpa Rijeka NCI: 8.4 Bosanski Brod NOVI SAD Capacity: 2.5 mtpa NCI: 2.5 PANCEVO NOVI SAD Refineries, Depots, Pipeline Capacity: 4.5 mtpa Capacity: 2.5 mtpa NCI: 4.9 NCI: 2.5 MOL Group Refinery BOSANSKI BROD ROMPETROL PETROTEL ONESTI 47.1% in INA Capacity: 1.5 mtpa Capacity: 4.8 mtpa Capacity: 2.5 mtpa Capacity: 3.5 mtpa Other Refinery NCI: NCI: 10.7 NCI: 7.6 NCI: 9.8 Crude Pipeline 4 Operating Environment in CEE today MOL Group Refineries BRATISLAVA SCHWECHAT Capacity: 6.1 mtpa Gdansk Capacity: 9.8 mtpa NCI: 11.5 NCI: 6.2 DUNA ARPECHIM Capacity: 8.1 mtpa Capacity: 3.5 mtpa Plock NCI: 10.6 NCI: 7.3 SISAK PETROBRAZI Capacity: 2.2 mtpa Capacity: 4.5 mtpa Litvinov NCI: 6.1 NCI: 7.3 Kralupy RIJEKA PLOCK Capacity: 4.5 mtpa Capacity: 13.8 mtpa NCI: 9.1 NCI: 9.4 Schwechat GDANSK Capacity: 6.0 mtpa Bratislava NCI: 11.8 KRALUPY Danube Capacity: 5.4 mtpa NCI: 7.5 Rompetrol Sisak Pancevo LITVINOV Petrobrazi Capacity: 3.3 mtpa Rijeka NCI: 8.4 Bosanski Brod NOVI SAD Capacity: 2.5 mtpa NCI: 2.5 PANCEVO Capacity: 4.5 mtpa Refineries, Depots, Pipeline NCI: 4.9 MOL Group Refinery BOSANSKI BROD ROMPETROL PETROTEL ONESTI 47.1% in INA Capacity: 1.5 mtpa Capacity: 4.8 mtpa Capacity: 2.5 mtpa Capacity: 3.5 mtpa Other Refinery NCI: NCI: 10.7 NCI: 7.6 NCI: 9.8 Crude Pipeline 5 MOL GROUP - integrated oil & gas company OPERATING NET REVENUE* EBIDTA CASH FLOW CAPEX USD 24.1 BN USD 2.3 BN USD 2.7 BN USD 1.2 BN Strong refinery and commercial position in CEE region: ► 6 production units with total capacity of 20.9 mtpa refining ► 2.1 mtpa petrochemicals ► >1,700 filling stations 6 Bratislava Refinery Area: 620 hectares Distillation capacity: 6.1 Mt/year Processed crude: 6 Mt/year Nelson complexity index : 11.5 Share of light products (%): 85 Number of employees: cca. 1200 7 7 Area: 800 hectares Danube Refinery Distillation capacity: 8.1 Mt/year Processed crude: 7 Mt/year Nelson complexity index : 10.6 Share of light products (%): 78 Number of employees: cca. 1300 8 High complexity and compliance with EU legislation has meant significant investment in past decade MUSD Investments in 2007-2013, 2014 FC3 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FC3 MOL SN IES INA 9 Achieving high complexity has meant significant investment in past decade BRATISLAVA REFINERY MUSD OverInvestments decade from in „Zero 2007 to -Hero“!2013, 2014 FC3 600 Products with low market 14% value 41% (heavy fuel oils, bitumen, 500 sulphur etc) 86% 59% Products with high added 400 value 1995 2005 (motor fuels, plastics) 300 DUNA REFINERY 200 Without Coker With Coker 14,0% 3,2% 15,0% 14,6% 22,4% 0,9% 100 24,9% 37,7% 6,8% 42,0% 4,5% 3,0% 11,0% 0 Gasoline Naphtha Kerosene 2003 2004 2005 2006 2007 Gas-2008 and heating2009 oil2010 Fuel2011 oil 2012 2013 2014Coke FC3 MOL SNOther IES INA We have further plans to move ahead RIJEKA PHASE 1 RIJEKA PHASE 2 COMBINE COMPLIANCE & FLEXIBILITY ENTERING THE TOP LEAGUE ► Diesel yield improvement ► Delayed Coker (1 Mtpa) technology ► Sulphur emission reduction ► Sulphur free products ► Increase NCI to 9.1 ► NCI increase above 10 ► 5-7 years’ investment cca. USD 700M ► 3-4 years investment, estimated at cca. USD 450M Product yields – basis, current (after Phase 1) and expected after Phase 2 0% 6% 0% 10% 6% 2% 1% 6% 5% 18% 4% 2% 12% 21% 28% 29% 21% 54% 33% 42% 2010 CURRENT PHASE 2 LPG Naphtha Motor Gasoline Middle Distillates Fuel Oil Bitumen Other chemical products Other 11 Non-competitive asset to transform MANTOVA REFINERY MANTOVA LOGISTIC CENTRE ► High diesel yield but low complexity ► Landlocked distribution center ► Good market position, no economical scale ► Pipeline connection to the ports ► Low competitiveness today ► Industrial zone, experienced manpower ► Transformation cost ca usd 120 mio Fit to survive today..... Fit to invest for tomorrow Global game European playground Predictable legislation Freedom to operate under market forces 13 Customer says always the final word... Competition is not only the basis of protection to the consumer, but is the incentive to progress. Herbert Hoover “Promoting competitiveness, which is the overarching aim of policy, must be woven into the fabric of all policy areas, at all levels of government….” Elzbieta Bienkowska THANK YOU FOR YOUR ATTENTION! 14 .