- Oil and gas business production to be phased out by 2050
- Sees CCS EBIT stable at around euros 6 bln by 2030
- Annual investments of euros 3.5 bln planned
- Shares fall more than 4%
March 16 (Reuters) - Energy group OMV said on Wednesday it aims to become carbon neutral by 2050 at the latest, as it shifts away from producing oil and gas and towards making specialty chemicals, plastics and sustainable fuels.
OMV is following other oil and gas companies in Europe, including Shell and BP , in setting a net zero carbon target by 2050, including emissions from the use and combustion of its products by its customers.
The Austrian company wants to become a leading maker of plastics for the energy, car, packaging and construction sectors and it will eventually depend on renewable feedstocks rather than oil.
OMV is targeting an increase in the production of sustainable fuels and chemical raw materials to 1.5 million metric tonnes per year by 2030.
The group said it does not see profit suffering in the medium term and expects a clean current cost of supplies (CCS) operating result of at least 6 billion euros ($6.6 billion) by 2030. That compares with 5.96 billion euros in 2021.
"If we want to maintain and expand living standards around the world while ensuring the survival of our society, we must move to a more sustainable way of doing business," said Chief Executive Alfred Stern.
Stern, a plastics engineer who took over as CEO last year, announced a shift to specialty plastics built around OMV's purchase of petrochemical group Borealis.
Unlike many European rivals, OMV will not invest in renewable power.
OMV said by 2030 it aims to reduce crude oil production by around 30% and natural gas production by about 15%. By 2050, it wants to have wound down its oil and gas production, which is due to reach 470,000 barrels of oil equivalent per day this year.
OMV plans annual investments (capex) of 3.5 billion euros per year, at least 40% of which is intended for low-carbon products. Last year, it spent 2.65 billion euros.
It said its priorities were "capex first, followed by dividend, inorganic growth, and deleveraging."
"More chemicals, less upstream, more sustainable targets. However, the lack of change in the capital returns framework and the structural increase in capex towards €3.5 billion will disappoint," Jefferies analysts said.
OMV's shares fell around 4.8% to 41 euros by 0925 GMT, underperforming an index of European oil and gas companies which was broadly stable.
($1 = 0.9122 euros)
Reporting by Alexandra Schwarz-Goerlich and Shadia Nasralla; additional reporting by Miranda Murray. Editing by Jane Merriman
Source: Reuters