MOSCOW (MRC) -- Austria's OMV will not make acquisitions before 2022 while it cements its transition into a chemicals group which increasingly uses less crude oil as feedstock, its chief executive said, diverging from other European oil and gas firms focusing on renewables, reported euters.
OMV in October completed a USD4.7 billion acquisition of a majority stake in Borealis, which makes speciality plastics and materials. Meanwhile, BP in June sold its petrochemicals business for USD5 billion.
While other oil and gas companies like BP or Royal Dutch Shell are turning themselves into broad energy providers and traders buying into renewable power development projects, OMV has shunned such investments.
"Do I understand the power market better than Eon or RWE? Definitely not. When I look into my transformation into chemicals, I can tell you, I have lots of competitive advantages," Chief Executive Rainer Seele told Reuters on Friday.
"Borealis is a technology leader with the Borstar technology (to make polyethylene and polypropylene)... They have the in-house technology, they are not licensing it out."
OMV also aims to lead the market in turning plastic waste into oil and increasing the bio-feedstock content for its refineries.
It sold its German petrol station network this month for around USD590 million as its bigger European rivals doubled down on their retail networks.
"Anti-cyclical decisions are sometimes very brave and successful," Seele said, asking why should he sell products other refiners make given OMV's German refinery focuses on petrochemicals and jet fuel production.
While BP and Royal Dutch Shell had to cut their dividends this year, OMV has kept payouts steady and Seele said he expected operating cash flow, which rose 6% in the first three quarters of 2020 from a year earlier, to rise in the fourth quarter.
As MRC informed before, the 380,000-metric tons/year steam cracker at Porvoo, Finland, operated by Borealis, resumed normal operations in early December after the company declared force majeure following a technical failure on 11 November. The cracker was shut down to allow necessary repair works, according to Borealis. The company began restart operations on 23 November, 2020. The force majeure was also lifted after the cracker reached full capacity utilisation.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
OMV (Osterreichische Mineralolverwaltung AG) is an Austrian oil company, the largest in Central Europe. Headquarters - in Vienna.
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