Transcript Hellenic Petroleum Company Presentation

Hellenic Petroleum
Company Presentation
Dr E. Tzellas
Chairman and Managing Director
4th Annual Capital Link
Forum Conference
New York
October 30, 2000
Business Environment
Greek Energy Market

Benefit from geographical position

No major natural sources of energy except for lignite

Oil and coal provide 58% and 33% respectively of PED

Development of natural gas infrastructure is progressing well and is strongly supported by
the Government and EU
Total Primary Energy Demand (PED)
Structure of Energy Supply
CAGR
2000-2010
50
100%
4%
(mtoe)
4.4%
40
80%
30
60%
20
3%
6%
3%
7%
4%
6%
60%
58%
59%
62%
35%
32%
39%
29%
1995
2000
2005
2010
Coal
Oil
40%
4.4%
2.7%
10
0
1990
Other
Source: IEA
0.3%
1995
2000
Coal
2005
Gas
2010
Oil
-3-
20%
0%
Source: IEA
Gas
Other
Drivers of Growth
Oil Consumption by Sector
Natural Gas Infrastructure
25
(mtoe)
20
15
10
5
0
1990
1995
Industry
2000
Residential/Commercial
2005
Transport
2010
Other
Source: IEA

Key drivers: growth in transportation and
residential consumption
-4-
Regional Environment - Growth Potential

Economic recovery and the need for modernisation of the oil and gas sectors in the
region is expected to provide significant opportunities to expand product sales into the
neighbouring countries
-5-
Business Activities
Refining - Current position

50% of the refining capacity in Greece
and 57% of the market

Competitive advantages:
–
–
–
–

strategic position
complexity
strong logistics infrastructure
unified operations
Skopje
Significant investment on stream at the
end of 1999
Refinery
Thessaloniki
Crude Pipeline

Production in compliance to Auto Oil I
Refinery
Burgas
Alexandroupolis
specifications
pipeline
Aspropyrgos
Refinery
-7-
(proposed)
Refining - Going forward

High growth in domestic and export sales

Substantial capex to:
–
increase capacity and complexity
–
increase margins and reduce costs
–
increase light product yields
–
produce on Auto Oil II specifications
Refining capex Drs bn
2000E - 2001E
Environmental
2002E - 2004E
Total
2000 - 2004
16
13
7
3
23
16
Other
34
18
167
11
2 01
29
Total
81
18 8
2 69
Logistics
Capacity and complexity increases
-8-
Marketing - Current Position

Leading market share

Presence in more than 1600 retail stations

Well perceived brand names

High quality fuels and lubricants

Country-wide coverage

Strong logistics infrastructure

Strong position in LPG and industrial sales
-9-
Marketing - Going Forward

Increase market share through acquisitions

Upgrade the retail network

Expand retail network outside Greece

Development of non - fuel retail sales

Development of motorway service station network
Marketing Capex, Drs bn
Total
2000 - 2004
2000E - 2001E
2002E - 2004E
25
1
4
25
5
Logistics – Other
6
11
10
2
16
20
Total
43
24
67
Acquisitions
Organic Growth
Retail Stations Modernisation
-10-
Petrochemicals - Current Position

Only volume producer in Greece

Leading market position

Integrated with refining operations

Strong geographical location advantage
over imports

Restructuring programme well underway

Start up of BOPP film plant (DIAXON)
Thessaloniki industial complex
PVC production unit
-11-
Petrochemicals - Going Forward

Development of new, high growth and high margin
products

Further closure/downsizing of unprofitable units

Profit improvement programme in petrochemical
operations after success in refining
Petrochemicals capex, Drs bn
2000E - 2001E
Polypropylene Plant
ΒΟΡΡ – film plant
Upgrade of existing units
Logistics – other
Total
-12-
2002E - 2004E
Total
2000 - 2004
37
9
5
37
14
1
3
1
1
4
50
6
56
Exploration and Production - Current Position

Exclusive rights over 54000 Km2 in Greece

Participation in exploration in 4 areas in
Western Greece in consortia with
international companies

Right to receive royalties for any production
in Greece

Natural Gas field in Epanomi

Participation (30%) with OMV in by-back
service contract in Iran

Evaluation of E&P projects in Albania, Libya

Strong commercial relationships with
producing countries
-13-
Exploration and Production - Going Forward

Participate in consortia for production sharing agreements
internationally

Leverage of Greek acreage portfolio to attract JV partners
E&P capex, Drs bn
2000E - 2001E
E&P in Greece
2002E - 2004E
Total
2000 - 2004
2
6
1
5
3
11
Acquisitions – Other
34
13
15
1
49
14
Total
55
22
77
Epanomi gas field development
E&P Internationally
-14-
Asprofos

Largest engineering company in SE
Europe

Activities currently focus on
projects within the Group

Rapildy expanding engineering
services to third parties and abroad
-15-
Natural Gas - Current Position

Main infrastructure already in place

High demand growth rates

Market liberalisation from 2007

Substantial EU funding

35% stake in DEPA

Option to acquire the remainder from
the Greek State
-16-
Natural Gas - Going Forward

Strong expected demand growth

Development of new business based on Natural
Gas feed

Introduction of strategic investors/operators entry

Expansion of household consumption
Natural Gas capex, Drs bn
Total
2000E - 2001E
2002E - 2004E
2000 - 2004
Participation in DEPA
64
-
64
Capex
11
14
25
Total
75
14
89
-17-
Financial Highlights
(IAS)
Group Net Income and Capex
Drs Billion
100
91,9
90
80
70
66,3
+ 88%
60
50
40
30
20
47,8
35,3
+ 94%
22,5
18,2
10
0
Net Income before taxes
Capex
1997
1998
-19-
1999
Group 6 Months Results 2000 versus 1999
Financial Results
90
80
82,0
66 %
68,1
Drs bn
70
131%
60
50
55,6
49,5
159 %
40
29,4
30
33,8
110 %
21,4
20
16,1
10
0
Gross Profit
EBITDA
Operating Profit
1H99
1H00
Source: Hellenic Petroleum IAS accounts
Note: EBITDA equals operating profit plus depreciation, depletion and amortisation
-20-
Net Income
Strategy Overview
Corporate Competitive Advantage
Strengths

Leading market position in Greece

Premium refining margins

Vertically integrated downstream operations

Competitive advantage from logistics, geography and limited import
infrastructure

Exposure to gas growth through increase in DEPA stake

Strong financial position to fund expansion
Opportunities

Growing domestic demand for light products

Option to increase stake in DEPA

Regional R&M expansion in South Eastern Europe

Increased participation in E&P projects
-22-
Vision - Strategic Target

Transform into a fully integrated
energy group

Significantly increase revenues and
profitability over the next five years
-23-
Corporate Strategy


Performance improvement
—
Reorganise operational structure in order to cut costs and improve
productivity
—
Maximise refining efficiency and profitability
—
Increase retail market share and improve retail margins
Operational/Geographical expansion
—
Increase production of lighter products
—
Increase exposure to natural gas
—
Continue restructuring petrochemicals (move to high value products)
—
Expand downstream activities in the Balkans
—
Develop upstream business
-24-
Capital Expenditure Programme
1998
-1999
Drs Bn
2000E
-2001E
2002E
-2004Ε
Total
2000-2004
Refining
86,1
81,0
187,9
268,9
Marketing
25,4
43,1
23,5
66,6
Chemicals
36,6
49,7
5,4
55,1
0,3
53,6
21,2
74,8
-
4.4
2.1
6.5
3,8
0,2
0,5
0,7
29,0
88,5
15,0
103,5
180,2
320,5
255,6
576,1
E&P
IT-Others
Asprofos
Participations
Total

Capex distribution 2000-2004
Participations
17,9%
IT-others
Refining
1,2%
46,7%
Marketing
11,6%
Chemicals
9,6%
Ε&P
13,0%
Major investments:
–
–
–
–
Thessaloniki Refinery upgrade
BOPP Film/Polypropylene new plants
Retail upgrade
E&P projects
–
DEPA stake
-25-