Petrom Project to Unlock Gas Production Potential

Bucharest, June 2nd, 2010

Gabriel Selischi

2 OMV-Petrom Project to Unlock Gas Production Potential

Petrom, the largest oil and gas producer in South-Eastern Europe

Petrom Facts and Figures (2009)► Turnover: RON 12,842 mn (EUR 3,029 mn)

► EBITDA : RON 2,950 mn (EUR 696 mn)

► Investments: RON 4,145 mn (EUR 978 mn)

► Employees: 27,470

► Contribution to State budget RON 6,720

Petrom has activities in: ►Exploration & Production

►Refining & Marketing

►Gas & Power

3 OMV-Petrom Project to Unlock Gas Production Potential

► In 2004, OMV acquired 51% of Petrom for 1.5 bn Euro

►Petrom is presently owned by OMV with 51.01% of its shares, Ministry of Economy – 20.64 %, Property Fund SA – 20.11 %, the European Bank for Reconstruction and Development – 2.03% and by minority shareholders –6.21%.

Shareholders’ structure

Property Fund

20.11%

Private investors

6.21%

Ministry of Economy

20.64%OMV

51.01%

EBRD 2.03%

4 OMV-Petrom Project to Unlock Gas Production Potential

Exploration and Production► Proven oil and gas reserves of Petrom Group of approximately 0.85 billion boe►Replacement reserves rate in Romania of 70% (73% at Group level)► Crude oil and condensate production in 2009: 4.39 mn tons► Gas production in 2009: 5.27 bn cm

► Exploration on Neptun block in partnership with ExxonMobil►New gas processing unit at Midia►Production started on Komsomolskoe

5 OMV-Petrom Project to Unlock Gas Production Potential

Natural Gas Exploration Potential

Transylvanian CarpathianProbability [Bm3] [Bm3]

P95 12.29 14.30P50 49.33 50.19P5 119.99 114.30

Mean 55.45 58.59

Basins

► Remaining Romanian Natural Gas exploration potential is estimated to be some 110 Bm3 in total► Transylvanian Basin contains dry gas, Carpathian basin contains natural gas with often high condensate content

Source:USGS Bulletin Romania Transylvanian basin (B2204E)USGS Bulletin Romania-Bulgaria (B2204F_508)

6 OMV-Petrom Project to Unlock Gas Production Potential

Natural Gas Exploration Potential

► Expected exploration successes will likely yield smaller gas discoveries

► Transylvanian and Carpathian basins can be considered mature exploration areas

0.15-0.300.30-0.60 0.60-1.251.25-2.50 2.50-5.00

5.0-10.010.0-20.0

0

2

4

6

8

10

12

14

16

18

20

Carpathian

Transylvanian

Bin Size [reserves/discovery in Bm3]

(all results <0.15 Bm3 excluded)

Num

ber

of D

isco

verie

s

7 OMV-Petrom Project to Unlock Gas Production Potential

2005-2009 Exploration Success in Petrom E&P

•Independenta appraisal

•Ochiuri

•Suplac

•Oprisenesti

•Pauleasca

•Sopot,Predesti,Pitulati

• Mamu

•Gas Discoveries

•Oil Discoveries

•Delta

•Torcesti

• Radinesti •Sinoe appraisal

• Paraieni • Valeni

•Leiculesti

•Cobalcescu

•2005•2006

•2007•2008

•2009

•Tepes Voda

•Colibasi

•Coltesti

•Stancesti

•Lovrin

8 OMV-Petrom Project to Unlock Gas Production Potential

Natural Gas Production and ConsumptionAnnual Gas Volumes [Bm3]

Consumption

Production

► Romanian Natural Gas Production provides approx 65% of domestic demand► Natural Gas output peaked in 1983 with over 37 Bm3

► Present Natural Gas production levels stable since 2003 at some 11 Bm3 per year► Natural decline compensated through intensive well work-over, reservoir management, installation of compression facilities and exploration successes

Source: BP Statistical Review of World Energy June 2009Institutul National de Statistica Romania ANRE

9 OMV-Petrom Project to Unlock Gas Production Potential

Petrom E&P Gas Production

►Exploitation of mature fields

►Decreasing reservoirs pressure

► Worn infrastructure

►Changes in regional gas consumption pattern

►More stringent EU and international regulations

►New gas exploration targets ►Install compressing capability to enable production of low pressure gas

►Optimization of gas production and processing infrastructure

►Increase of gas transportation capability ►Compliance and energy efficiency measures

Challenges Consequences

Gas infrastructure

10 OMV-Petrom Project to Unlock Gas Production Potential

Investment in Gas Infrastructure Optimization

Gas infrastructure system – Major fields in SW of Romania

►Petrom presently engages in optimization of the gas production and processing system associated with major gas fields in the SW of Romania, accounting for ca. 40% of its natural gas production

► The optimization targets consist in:►Removal of existing infrastructure

bottlenecks ►Modernization or replacement of

worn equipment ►Production enhancement►Assurance of export gas quality

Optimization target

11 OMV-Petrom Project to Unlock Gas Production Potential

Investment in Gas Infrastructure Optimization Integrated assessment of the gas production and processing system:► Complex modeling of wells production dynamic and surface facilities system simulation

► Equipment integrity assessment

► Process optimization for production enhancement

Gas process diagram related to major fields in SW of Romania

12 OMV-Petrom Project to Unlock Gas Production Potential

Investment in Natural Gas Development► To ensure continued supply of the Romanian gas market, Petrom presently pursues installation of a new gas compressor station near Hurezani Gas Delivery Point ►This will provide access for SW gas production to the main consumers irrespective of seasonal fluctuations or off take disruptions and resulting high pipeline pressures

Transgaz pipelines

New metering station

New production pipelines

New compressor

Storage

Hurezani

Area

CorbuBucharest ring

Hurezani

Turburea

2

4

3

Ghercesti

Bilciuresti

DOLJCHIM

DONAWCHEM

Bucharest

1

► Upstream gas pipelines to secure gas delivery to compressor inlet

► New compressor station in Hurezani area to increase delivery pressure

► Pipeline to connect new compressor station with Transgaz delivery point

► New metering station in Hurezani delivery point

1

2

3

4

13 OMV-Petrom Project to Unlock Gas Production Potential

Hurezani Gas Delivery Project New Bulbuceni compressor station:►Three independent centrifugal compressor trains and auxiliary equipment

►Combined gas output of ca. 4 mn cm/day at 40 bars discharge pressure ► Start-up of the new facilities scheduled for summer 2010

Gas cooler and inlet scrubber Flare Water tank

Compressor house

14 OMV-Petrom Project to Unlock Gas Production Potential

Hurezani Gas Delivery Project New Hurezani fiscal metering station:►Filter separators, ultrasonic meters, turbines meters, pressure controls, condensate vessel, vent stack

New pipelines: ►New 4 km 20" upstream pipeline

►New 11.5 km 20" downstream pipeline to transport compressed gas from Bulbuceni compressor station to new Hurezani Metering Station

Upstream pipeline welding Downstream pipeline tie-in Metering station

Hurezani metering station

15 OMV-Petrom Project to Unlock Gas Production Potential

New Technologies - To Be Assessed►Mitchell Energy started hydraulic fracturing and producing from wells in the Barnett in Texas in the mid 1980ies

►Devon Energy, after it acquired Mitchell Energy in 2002 for USD 3.5 bn, started horizontal drilling

►Up to now some 11,000 well have been drilled producing some 48 bcm/a in the Barnett alone

►Operations in other shales increased US shale gas production to some 70 bcm/y and is forecasted to reach approximately 250 bcm/y by 2020

Shale Gas Production in the USA

Source: WoodMackenzie

16 OMV-Petrom Project to Unlock Gas Production Potential

Shale Plays in Europe

17 OMV-Petrom Project to Unlock Gas Production Potential

Europe in Need of Unconventional Resources

18 OMV-Petrom Project to Unlock Gas Production Potential

Future Development Will Depend On Gas Prices

►Gas price still regulated by basket pricing mechanism to approximately half of import Gas prices

►The price alignment forecasted would bring internal gas prices to international level

►The increased gas price might render current and further investment economically efficient

Import price

Regulated price

Forecast trends

Thank You!