Technological and HSE related best practice in the Hungarian HC industry
Managing Director
of Eurasian E&P
MOL E&P Division
Technological and HSE related best practice in the Hungarian HC industry
●
●
… that
came
true.Once there was a VISION…
●
WelcomeBienvenueWillkommen
BenvenutoBienvenida
Witaj
Tervetuloa
Welkom
Üdvözöllek
Chapter I.
Agenda
MOL Group
MOL Group -
so powerful what you can’t imagine…
Financial highlights
-
outstanding growth in the last 5 years
Operationalhighlights
►
Market presence in more than 40 countries
►
More than 75 years upstream operational background
►
Leader in core downstream markets of Hungary, Slovakia and
in Croatia
►
Growing international business and strong ties to Western-Europe, Russia, Africa and the Middle-East
►
State of the art assets serving one of the high growth downstream regions
►
Management with outstanding track record of operational efficiency
MOL Group is a leading European integrated energy company
EBITDA*
by segment
USD mn
-5000
50010001500200025003000
2005 2010
E&P DS G&P C&O
*EBITDA excluding special items.
CAPEX by segment
USD mn
0500
100015002000250030003500
2005 2006 2007 2008 2009 2010E&P DS G&P C&O
Integrated portfolio based on 3 pillars
DOWNSTREAMUPSTREAM GAS & POWER
► 619 MMboe SPE 2P reserves► 144 Mboe/day production► Production in 7, exploration in 12 countries
► Over 70-year experience in CEE► Over 20-year international presence► Well-positioned player in the Middle East► Outstanding exploration drilling success► One of the lowest lifting cost in Europe
E&P R&M Petchem Gas Storage & Power
►
1.9 bcm UGS capacity
Gas Transmission
Crude to plastic integrationUnbundlingGas value chain
Electricity supply
►
5,560 km pipeline in Hungary
EBITDA (2010 %)
Previous pipeline developmentsUGS
Potential development
►
International transit
►
Good geographical position
►
EUR-base return on storage
►
Good geographical position
► CEZ partnership
►
High regulatory risk
►
Currently not a growth driver
►
Monitoring to develop diversified portfolio
RefineryRefineryPetchem unitPetchem unit
►
5 refineries, 470 thbpd►
21.6 Mtpa
sales ►
1,600+ filling stations
►
Top assets with high net cash margin
►
Strong landlocked market position
► 2 petchem plants ►
880 kt ethylene, 1.2Mt polymer cap.
►
The largest integrated olefin and polymer player in CEE
►
Efficiency improvements and synergy through joint optimization of assets
►
Focus on Rijeka refinery upgrade►
Above average growth in sales
EBITDA (2010 %)
EBITDA (2010 %)
►
Field development driven growth in the short term
►
Long term growth based on existing exploration portfolio
Chapter II.
Agenda
MOL Group
MOL Exploration & Production Division
MOL E&P -
upstream means more than this for us…
Highlights of Exploration & Production
Strengths
►
Leading European low cost onshore producer
* ►
One of the lowest lifting cost among European Upstream
players
*►
Outstanding exploration success rate ►
Proven
track record of successful project execution
ranging
geological surveys to large scale
production at major projects
* IHS Herold Database
Net income per unit*
peers avg.
USD/boe
peers avg.
Unit Lifting costs*USD/boe
►
Focus on high return development projects►
Exploration with international focus is targeting reasonable
resource base►
Minimizing natural decline in the CEE region►
Maintaining production level in CIS ►
Key regions: Syria, Hungary, Kurdistan, Croatia and Russia
Goals
Production activities in 7 countries
Croatia, Croatia, HungaryHungary
Reserves: 366.6
MMboe
Production: 85,100
boepd
Hayan
Block
Reserves:
45.7
MMboe Production:
7,900
boepd
CroatiaCroatia
Reserves:
56.8
MMboe
Production:
22,700 boepd
ZMBReserves: 38.5
MMboe
Production: 12,000 boepd BaituganReserves: 61.9
MMboe
Production: 4,600 boepd Matjushkinskiy
Block
Reserves: 29.4
MMboe
Production: 3,000 boepd
Tal Block
Reserves:
11.9 MMboe Production:
4,700
boepd
CEE onshoreCEE onshore SyriaSyria
Other InternationalOther International
CEECEE
offshoreoffshore PakistanPakistan
EgyptEgypt
Ras
Qattara, West Abu Gharadig, North Bahariya, Sidi
Rahman
AngolaAngola
3/05 Block, 3/85 Block,
3/91 Block
Total reserves: 8.0 MMboe
Total production: 3,500 boepd
Note: SPE 2P reserves. Reserves and production of non-consolidated projects are not highlighted.
RussiaRussia
Production breakdown by countries and products, 2010 Reserves breakdown by countries and products, 2010
3%
37%
5%
14%
38%
3%
Hungary CroatiaRussia SyriaPakistan Other
56%
10%
34%
Oil Gas Condensate
1%2%
41%
21%
7%
28%
Hungary CroatiaRussia SyriaPakistan Other
49%
8%
43%
Oil Gas Condensate
Production: 144 MboepdReserves: 619 MMboe
Exploration activities in 12
countries
KazakhstanKazakhstan
PakistanPakistan
RussiaRussia
Federovskoye Block
Tal, Margala
& Margala
North, Karak Blocks
CEE onshore, offshore, CEE onshore, offshore, unconventionalunconventional
Other InternationalOther International
Cameroon, Angola, Cameroon, Angola, Oman, India, SyriaOman, India, Syria
Kurdistan Region of IraqKurdistan Region of Iraq
Akri-Bijeel, Shaikan
Blocks
Hungary, Croatia, Hungary, Croatia, Romania Romania Recoverable resource potential*: 145 MMboe
Matjushkinskiy, Surgut-7, Baitex
BlocksHungary, Croatia, RomaniaHungary, Croatia, Romania
*Working Interest (un-risked)
Estimated recoverable resource potential*
490
725
120
50
65
200
MMboe
USD
mn Exploration CAPEXExploration CAPEX
0
50
100
150
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Hungary International
0
10
20
30
40
50
CEE InternationalTotal drillings Successful drilling
70%
48%
No. of wells
Average: USD 90 mn
Increasing exploration activity with new focus areas Outstanding exploration success rate (2006-2010)
Bajánsenye-Õriszentpéter-D
Tóalmás-D
Nagykáta
GombaNagykörû
Szank-ÉNYSzank-ÉKSzank-DKTázlár
Kiskunhalas-ÉK-É
Öttömös-K
Szank-NyCsólyospálos-KKömpöc-D
Kiskunhalas-DKiskunhalas-ÉK
Jánoshalma-ÚjBorota
Kiskunmajsa-DRuzsa-É
Dány
Demjén
Szeghalom Mezõsas-Ny
MartfûDévaványa
Méhkerék
Földes-K
Hosszúpályi
Kismarja-NyFegyvernek
Kisújszállás-Ny
Endrõd-É
Endrõd
Nagylengyel
Sávoly
Sávoly-D-K
Tótkomlós-D
BattonyaBattonya-K
MezõhegyesMezõhegyes-Ny
Csanádapáca
AlgyõÜllés
Szeged-Móraváros
Szolnok, 2007.június 22.
30 40 50 km0 10 20
A MOL Nyrt. jelentõsebb termelõ mezõi
MOL Nyrt.Kutatás-Termelés Divízió
Átnézeti térkép
Olajtermelõ mezõ
Színkulcs:
Gáztermelõ mezõ
Készült: a DTA-200 2.0 jelzésû digitális térképmû felhasználásával
Olaj- és gáztermelõ mezõ
BudafaMezõcsokonya-Ny
Barcs-Ny
Görgeteg-Babócsa
Ortaháza
Ölbõ CO2
PusztaföldvárKaszaper-NagybánhegyesDél-Békés
Termelési volumen:
Földgáz: 1,5 milliárd m felett, 3 olaj: 500 e tonna felett
Földgáz: 0,5-1,5 milliárd m között, 3 olaj: 100-500 e tonna között
Földgáz: 0,5 milliárd m alatt, 3 olaj: 100 e tonna alatt
The domestic ‘playground’
Gas fieldOil fieldOil and gas
field
AlgyAlgyőő
fieldfield
As a dominant area, in 2009 Algyő
provided 40% of total domestic oil and gas production
Palaeogene area Hosszúpályi-South gas field
Since the exploration in 1999, Palaeogene area oil and gas-condensate fields have been playing a significant role and in 2009 provided 19% of domestic oil
Several newly discovered fields with remarkable potential, providing 10% of domestic gas production in 2009
MOL
Zala ege rszeg
Pusztae derics
Csurgó
Kom árom
Budapest
Városföld
Szank
Zsa na
Adony
Algyő
Kardoskút
Tiszaújvá ros
Hajd úszobo szló
Fényeslitke
Gyõr
Compr essor sta tion
Pump sta ti on
Refine ry
H ydrocarbon field
U nder ground Gas Stor
Gas line
Crude oil l ine
Maros1
Main production areas
Distribution of operating technologies
Exploration licencesin Hungary
Chapter III.
Agenda
MOL Group
MOL Exploration & Production Division
MOL Group SD Strategy and HSE MS
The lesson was learned…
75 blowouts in Hungary since 1937 (last one in 2000)
Continuous organic growth with a focus on sustainability
►
SD Strategy is integrated part of the Group Strategy►
In 2006-2010 there were 7 SD initiatives defined►
In 2011 there was an update process:–
6 new SD focus areas were defined at Group-level with 20 related topics–
More harmonised with organisational responsibilities–
E&P, R&M, Petchem and Retail has prepared business division level objectives and targets
MOL Group Sustainable Development Strategy
„Achieve and maintain an internationally acknowledged leader position (top 20%) in sustainability performance.”
MOL Score 2007 (%) MOL Score 2008 (%) MOL Score 2009 (%)Total Score 65 68 75
Economic 73 68 79Environmental 64 68 73Social 56 69 72
►
Track the performance of the global sustainability leaders (top 10% of the 2,500 largest companies in the DJ Global Indexes are selected as components of
DJSI World)►
MOL participates in the assessment since 2006
Dow Jones Sustainability Index
Climate Change
Health &Safety
Communities
Human Capital
Economic Sustainability
Ethics and ComplianceCorporate Governance and Management TransparencyRisk Management
Customers
Economic Sustainability
Environment
WaterWasteEmissionsBiodiversity
Environment
Health & SafetyPeople Health and SafetyOperational integrity
CommunitiesCommunity RelationshipsSocial InvestmentsHuman Rights
Climate ChangeFuture product portfolioEnergy efficiencyRenewable energy
Human CapitalTalent Attraction and RetentionHuman Capital DevelopmentLabour Practices
6 elements are the base of the sustainability
●
Reducing risk, protecting people and promoting efficiency
We are committed tocontributing to Sustainable Development by protecting Health, Safety and the Environment and the social impact of our activities as an integrated part of
day-to-day business. achieving a generative HSE culture to prevent incidents of every
type and reducing our environmental footprint whilst maximising positive impact on society in general.
MOL Group HSE and Social Impact Policy
Goals and implemented actions
HEALTH•
Execute Workplace Health Promotion Program
SAFETY•
MOL Group HSE Management System •
Contractor Safety Program •
Incident Investigation System (IRIS)•
COMPASS (Comprehensive Risk Assessment)•
Implementing defensive driving culture
ENVIRONMENT•
Decrease amount of known environmental provision-based liabilities •
Development of standardised waste management practice •
Achieve integrated water management (with focusing on protection
of freshwater resources)•
Optimize greenhouse gas emissions and support the increase of renewable energy utilisation
HSE Management System -
having all regulations in one system
1.
HSE Leadership and Accountability
2.
HSE Risk and Change Management
3.
HSE Training and Competences
4.
HSE Planning and Targets
5.
Contractor and Supplier HSE
6.
HSE Design and Construction
7.
Safe Operation
8.
Health Prevention and Promotion
9.
Environmental Stewardship
10.
HSE Legal Requirements and Documentation
11.
Product Stewardship
12.
HSE Communication and Consultation
13.
HSE Incident Reporting and Investigation
14.
Emergency Preparedness and Response
15.
HSE Operation Assessment and Improvement
Chapter IV.
Agenda
MOL Group
MOL Exploration & Production Division
E&P SD Strategy and HSE
MOL Group SD Strategy and HSE MS
We believe that there’s a total different way of approach…
Upstream is not a „green”
industry
but we have opportunity to minimise our footprint
Climate Change
Decrease electric consumption used for lighting by 25%- modernization of electric systemsDecrease CO2 emissions by 20%- carry on energy racionlisation projects - Füzesgyarmat - 2011- Hajdúszoboszló - 2011- Szank - 2012- Algyő - 2013
●
Environment
Decreasing fresh water intake by 20%- changing steam boilers to water ones- Algyő 2011, Szank 2012Minimizing fluids disposal- on site treating of tank cleaning fluidsDecreasing air emissionsTaking care of wildlife close to ouractivities- working out biodiversity studies
Health & Safety
Improving HSE culture goals- management HSE awareness trainings- comprehensive HSE trainings for - employeesManaging all HSE risks (including stress)Fully implement Process Safety Management (PSM)Require maximum HSE standards from contractors
Communities
Enhance the Community Engagement Program for providing a friendly environment for smooth operation of the company in the areaEstablish stakeholder engagement policy at our operationsIn case of new operations, identify local social demands, initiate actions
Human Capital
Utilizing Human Resources Providing equal ranking of employees Continuous feedback from employeesAssessing professional competencies, providing tailor made trainings - PetroSkillsApplying local staff
Economic Sustainability
Economic Sustainability
Improving reserve life index and reserve replacement rateFull implementation of HSE Management System on Upstream level
Upstream HSE –
local initiatives and best practises
Main activities
HSE forums within all Hungarian productionInvestigating all incidents and near misses, improving near miss reportingRegular HSE inspections with unified checklistsUnifying HSE audits in Hungary, managing Behaviour Audits (focusing on human aspects)Successful IMS audit without non-conformance
Participating in associations (OMBKE, SPE, OGP - 2009)
Environment protection Provision Based Environmental Liabilities - recovering pollutions from the past
RBER - Risk based approach to manage the pollution (assess, measure, intervene, monitor)ENRAC - Energy Rationalization (6 fields)
Operated HSE reporting systems
•
Integrated HSE Information System (HSE INFO)•
Integrated HSE weekly reporting•
Integrated HSE incident reporting and investigation
Utilizing primary and secondary energy sources
Projects
Project description
Future prospect
Overview / Concept
Low calorific
gas
Utilize MOL’s existing resources
for power generation purposes
Increased domestic gas production
lower power import dependency
Small size
gas resources
with high inert content (low calorific value)
Pilot project in progress
Geothermal energy CEGE Co.
Use MOL’s upstream experience
in exploring geothermal opportunities for power generation
CEGE
to be the first and leading player on the (power generation) CEE geothermal market
Significant thermal water potential
ExplorationStatus
Biogas
Power and heat generation
by burning biogas in gas engines
Increase green electricity
portfolio
Biogas production by utilizing the by-
products of bio fuel production
Feasibility
Energy efficiency
Energy efficiency improvements of current production processes
Reduce
the energy costs
of MOL Group
Further developments in energy efficiency is an iterative
process
Audit ongoing
Waste heat recovery
Utilizing the waste heat of productive processes
Identify heat points to install power generation units
External electricity need of MOL Group could be reduced
Pilot project in progress
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Thank you for your attention!
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