OMV Sees Strong 2006

In 2006, OMV Aktiengesellschaft has again generated strong financial results. The company continued its profitable growth consequently and was able to further expand its position as Central Europe's leading oil and gas group. From January to December 2006 Sales of the group rose by 22% to approximately EUR 19 bn, EBIT (earnings before interest and taxes) increased by 5% to approximately EUR 2 bn. With an EBIT of EUR 677 mn, Petrom's contribution to overall EBIT was substantial. Net income – compared to 2005 – increased by 11% to EUR 1.7 bn. Cash flow from operations decreased slightly by 4% to EUR 2 bn. The gearing ratio is 7%.

OMV's CEO Wolfgang Ruttenstorfer said: "In 2006 we consequently continued our profitable growth path. The good results highlight the positive dynamic of our development as an integrated oil and gas group. OMV has strengthened its position for further growth in all its business divisions. Achieving the leading position in the Turkish retail and commercial business was an important strategic step. The gas division will be further internationalized and expanded as a third pillar of our Group. For our customers this leads to an increased security of supply of this important commodity. At Petrom, modernisation is going according to plan. Petrom's good contribution to the results reflects its important role in regard to OMV's 2010 growth strategy: We aim to be the company that is the most successful at taking advantage of the possibilities offered by the Central and South-Eastern European growth belt and the neighboring regions." From January to December 2006, total investments of EUR 2.5 bn were substantially higher than those of the previous year (2005: EUR 1.4 bn). EUR 732 mn of these investments were directed into E&P, mostly for field developments in New Zealand, Austria, Romania and Kazakhstan. EUR 1.6 bn were invested into R&M. The acquisition of 34% of Petrol Ofisi, the purchase of 70 Aral filling stations in the Czech Republic and investments in petrochemicals in Burghausen were the most important positions. In the gas segment approximately EUR 36 mn were invested, mostly into the expansion of the West Austrian pipeline (West-Austria-Gasleitung – WAG).

Compared to the fourth quarter 2005, the respective sales of 2006 increased by 13% to approximately EUR 5.2 bn and EBIT of 2006 increased by 19% to EUR 394 mn. At the end of December 2006, OMV Group (incl. Petrom) had 40,993 employees.

Preparing for the future

In June 2006 the OMV Future Energy Fund was established, aiming to identify projects in the field of renewable energy within the OMV Group, provide assistance with their implementation and financially support them with funds of more the EUR 100 mn. With this fund, OMV intends to commence its transition from a pure oil and gas group into an energy group whose portfolio includes renewable energies. Funding for the first six projects in the areas of renewable energy and the reduction of greenhouse gases was granted in December 2006.

In the year 2006 OMV increased its sales in this segment by 14% to approximately EUR 17.3 bn. This is mostly due to higher sales volumes in the refining and marketing business and to higher product prices. In 2006, EBIT amounted to EUR 121 mn (2005: EUR 411 mn). This result reflects lower bulk margins in comparison to the financial year 2005. High crude oil prices and essentially lower refinery margins especially burdened the Romanian refineries, as the level of own consumption and losses in that area is still significantly above Western standards. Despite first successes in restructuring, the high energy consumption and the unfavorable product yield structure had a strong negative influence on the R&M results.

The EBIT contribution of Petrochemicals (excl. Petrom) was EUR 128 mn and – despite higher energy prices – has increased by 19% compared to 2005. Higher margins and increased sales volumes had a positive effect.

OMV's total refining sales volumes rose by 4% to 23 mn t (2005: 22 mn t), with a substantial contribution from Petrom. Overall capacity utilization increased slightly to 92%.

Sales volumes in Marketing increased by 6% to 18.5 mn t (2005: 17.4 mn t). As of the end of December 2006, OMV including Petrom was operating 2,540 filling stations. The acquisition of 70 ARAL filling stations from BP in the Czech Republic, established OMV as the clear number one in the Czech filling station market. The acquisition of a 34% stake of Petrol Ofisi, the leading filling station company in Turkey, marked an important strategic step in the Group's expansion. OMV controls Petrol Ofisi with the second core shareholder, Dogan Holding. OMV is now the leading oil and gas group in the growth markets between the Black Forest in Germany and the Eastern border of Turkey. In the coming years, OMV will also accelerate its growth in Bavaria. By 2010 OMV will invest approximately EUR 1.1 bn, in order to expand its leading position as provider of petroleum products and petrochemicals in the region. This is connected to the construction of the approximately 360 km long Southern ethylene pipeline (Ethylen-Pipeline Süd – EPS) from Münchsmünster to Ludwigshafen, which is due to be completed in the third quarter 2008. This provides a strategically important connection between the South East Bavarian chemical triangle and the significant North West European ethylene network at Ludwigshafen.

In total, OMV increased its marketing market share in Central European growth markets to 20% and achieved its primary growth target for 2010 ahead of time.

Exploration and Production: strong contribution to EBIT

Sales in the E&P segment rose in the financial year 2006 by 15% to approximately EUR 4 bn (2005: EUR 3.4 bn), mainly due to higher crude oil prices. The average realized crude oil price of USD 58/bbl (Barrel) was 17% above the comparable 2005 value and the realized gas price was approximately 25% higher compared to the previous year. EBIT in this segment increased by 20% to slightly more than EUR 1.9 bn.

Total production in oil, NGL (natural gas liquids) and gas slightly declined by 4% to 118.4 mn boe (barrels of oil equivalent), which corresponds to an average daily production of 324,000 boe. Oil and NGL production of 61.6 mn bbl was 6% lower than last year's level (2005: 65.6 mn bbl). The decisive factor were lower production volumes in Romania that in the short term could not be offset by improved reserve management and exploration successes, lower volumes in the UK and the sale of assets in Qatar and Ecuador as well as an alteration of contracts in Venezuela.

Gas production decreased slightly by 1% and was 56.8 mn boe (2005: 57.8 Mio boe). Slightly reduced volumes in Romania could almost be offset by improved production in Austria, Pakistan and New Zealand. As of December 31, 2006, total proved reserves (including Petrom) were 1.3 bn boe which is approximately 6% below last year's level. In 2006 this segment continued to strengthen its international core regions and started establishing an E&P portfolio in Russia through its subsidiary Petrom: with the acquisition of eight exploration licenses and one exploration and production license, the Group made an entry into one of the countries in the world, richest in oil and gas. In December 2006, the Yemenite oil field S2 in which OMV has a share of 44% started production with an initial daily production rate of approximately 500 bbl (OMV share). By 2008 a daily production rate of approximately 5,000 bbl should be achieved, and should be increased to approximately 14,000 bbl by 2009/2010. In the Libyan Block NC 186 in the southern Sahara, OMV made another significant oil find, the seventh oil discovery in this area within the last five years. In Tunisia the company was also successful with two oil and gas discoveries. In New Zealand, where, having started production in the Pohokura gas field, the Group became the country's third largest gas producer, OMV acquired two new exploration licenses. OMV entered into the Egyptian market for the first time with an offshore exploration license, expanding its Northern African core region of Tunisia and Libya to an additional country. The opening of an office in Norway gives OMV the possibility of now becoming active in the E&P segment in this country and in finding synergies with the Group's activities in the British North Sea. In February 2007 OMV acquired two exploration licenses in Norway. In order to streamline its portfolio, OMV closed the sale of its assets in Qatar and in Ecuador.

Gas: internationalization and supply security

As of January 1st, gas marketing activities have been transferred out of Petrom's E&P business and are being reported in the gas business. This was a significant step for the internationalization of OMV's gas business and has led to a clear improvement in the financial results of this segment. Since the fourth quarter 2006 EconGas is fully consolidated in the OMV Group. Good performance in the marketing, trading, and logistic business as well as the expansion of EconGas to Germany and Italy contributed to the good results.

From January to December 2006, segment sales rose by 158% to EUR 2.1 bn (2005: EUR 803 mn), compared to the same period of last year. EBIT increased by 98% to EUR 135 mn (2005: EUR 68 mn).

Sales volumes of gas rose by 58% to 14.11 bcm. The total gas transportation capacity sold increased by 4% to 1,587 mn cbm/h*km (2005: 1,532 mn cbm/h*km), primarily due to the expanded capacity of the Western Austrian gas pipeline (West-Austria-Gasleitung – WAG). The average storage capacity sold increased by 16% to 672,400 cbm/h. On 28 September 2006 gas supply contracts for Austria with Gazprom until 2027 were finalized. The existing contracts originally would have expired in 2012. The overall volume of the contracts amounts to approximately 7 bcm per year. Overall gas supplies amounting to a volume of approximately 150 bcm were secured for Austria. These long term supply contracts constitute the backbone of Austria's gas supply.

The completion of the pipeline work for the expansion of the Trans Austria Gas pipeline (Trans- Austria-Gasleitung – TAG) also took place during this reporting period. Due to this, the capacity of this pipeline was expanded by 4 bcm to 41 bcm a year from January 2007.

The Nabucco Project – the planned gas pipeline via Turkey to Europe, from the Caspian Region – received high-level political backing in the reporting period. During the course of an international Nabucco conference on June 26, the responsible ministers from Turkey, Romania, Bulgaria, Hungary and Austria, as well as the Energy Commissioner of the EU, signed a joint declaration of support for Nabucco. In addition, Nabucco was declared as one of the most important infrastructure projects for Europe by the EU Commission in the courses of the presentation of the new "Energy policy for Europe". In regard to the planned development of a LNG (Liquefied Natural Gas) terminal in Croatia, further progress has been made. In September 2006, a feasibility study for the terminal was commissioned and a cooperation agreement with E.ON Ruhrgas was signed. The terminal should begin operating 2011/2012 with a capacity of 10 bcm per year. Together with the Nabucco Project the terminal aims at strengthening Europe's supply security substantially.

Outlook 2007

OMV Group will continue to concentrate on expanding its core businesses. The planned incorporation of OMV's and IPIC's shares of AMI International (each company holds 50%) into Borealis is part of this strategy and will allow OMV to work even more consequently at expanding its leading oil and gas position in the European growth belt and in the neighboring regions.

OMV expects crude oil prices in 2007 to fall to a lower level than those in 2006, however strong short-term fluctuations are expected. The USD exchange rate is expected to be slightly weaker compared to the previous year. The Group is anticipating similar refining margins to the previous year.

In the Refining and Marketing segment three larger refinery shutdowns are planned. In the second quarter 2007 maintenance shutdowns of the Petrom refinery Arpechim and of the crude oil distillation in Schwechat are planned for a period of one month each. In the fourth quarter the entire refinery Burghausen will be shut down for maintenance, with the expansion of the cracker being implemented during this time. Due to these measures, the refinery output in the year 2007 will be lower than that of the previous year.

The investment focus in 2007 of R&M will be on the further modernization of the Petrom refineries and the construction of a thermal cracker in Schwechat, in order to be able to process more heavy crude. In addition, measures to further strengthen the quality of the filling station network will be undertaken. In regard to marketing margins an improvement is not anticipated. Due to the expansion of the filling station network and to the continued modernization of Petrom's filling station network a slight increase of the sales volumes is expected.

The Exploration and Production segment will continue to expand its activities in the core regions. The oil and gas deposits recently discovered will be evaluated and further steps toward production will be made. The investment focus in 2007 is on the development of the gas field Strasshof in Austria, the discoveries in southern Sahara in Libya, the Maari oil field in New Zealand, the oil field Komsomolskoe in Kazakhstan and the concluding work in the gas field Pohokura in New Zealand as well as the Yemeni oil field S2. Major investments will be made into modernizing Romanian production facilities. The aim is the increase of the wells' and facilities' efficiency, leading to an increased production and a reduction of production costs.

Despite a strong competitive environment regarding the acquisition of reserves and production, selective efforts will be maintained in this direction.

In the Gas segment, internationalization will be further enforced. Marketing and trading will develop both thanks to the growth of Petrom's gas business and to the presence of EconGas in Germany and Italy. OMV also plans to expand the transit gas pipelines in Austria and to increase storage volumes.

In relation to the security of supplies, an additional focus will be on projects that aim at diversifying gas supplies. The main focus will remain on the Nabucco Pipeline Project and on the LNG Terminal in Croatia.

Wolfgang Ruttenstorfer stated: "In the year 2006 we have further increased our position for our continued growth and created good pre-requisites for achieving our 2010 growth targets.