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Petrom

Investor Presentation

Andreas Matje, CFO of Petrom

June 2014

1 Investor presentation

Disclaimer

This document does not constitute a recommendation, an offer or invitation, or solicitation of an offer, to subscribe for or purchase any securities and neither this

document nor anything contained herein shall form the basis of any contract, investment decisions or commitment whatsoever. This document does not include

any financial analysis or financial research and may not be construed to be a or form part of a prospectus. It is being furnished to you solely for your information.

This document and its contents are proprietary to OMV Petrom S.A. (“the Company”) and neither this document nor any part of it may be reproduced or

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No reliance may be placed for any purpose whatsoever on the information contained in this document, or any other material discussed verbally, or on its

completeness, accuracy or fairness. None of the Company, connected persons, their respective affiliates, or any other person accepts any liability whatsoever

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provided as at the date of this document.

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This document includes ”forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and section 21E of the U.S. Securities

Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this document, including, without limitation, those

regarding the Company’s financial position, business strategy, plans, and objectives of management for future operations (inc luding development plans and

objectives relating to the Company’s products), are forward-looking statements. Such forward-looking statements involve known and unknown risks,

uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different

from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on

numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future

and speak only as of the date of this document. None of the future projections, expectations, estimates or prospects in this document should in particular be

taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future

projections, expectations, estimates or prospects have been prepared or the information and statements contained herein are accurate or complete. As a result

of these risks, uncertainties and assumptions, you should in particular not place reliance on these forward-looking statements as a prediction of actual results or

otherwise.

This document does not purport to contain all information that may be necessary in respect of the Company or its shares and in any event each person receiving

this document needs to make an independent assessment. The Company expressly disclaims any obligation or undertaking to release publicly any updates or

revisions to any statements including any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto

or any change in events, conditions or circumstances on which any such statement is based.


Petrom at a glance


Petrom is an operationally integrated oil & gas player

Oil: Supplies 100% of

oil for Petrobrazi

Romania

Kazakhstan

Exploration and

Production Refining and Marketing

Gas and Power Gas: Supplies 100%

of gas for Brazi

► 4 mn toe/yr crude oil and NGL

► 5.2 bcm/yr gas

► 707 mn boe proven reserves

(~11 yrs of current production)

► 0.4 mn toe/yr crude oil and NGL

► 0.1 bcm/yr gas

► 21 mn boe proven reserves

► Gas sales 4.9 bcm/yr (up to

40% of Romanian demand)

► Brazi gas-fired power plant

(860 MW)

► Dorobantu wind park (45 MW)

► Petrobrazi refinery

(4.2 mn t/yr capacity)

► 3.6 mn t marketing sales

► 785 filling stations (Romania,

Bulgaria, Serbia, Moldova)

2013 FIGURES


Petrom is the leading industrial company in Romania

1 Equivalent share of state budget income in 2013e (non consolidated); Include: profit tax, royalties, employer social

contributions, excises incl. custom duties, VAT, employee related taxes, other direct and indirect taxes, dividends paid to state

Largest private employer

~20,000 direct employees and

more than 60,000 indirect jobs

Main energy supplier

Accounts for ~40% of oil, gas

and fuel supply, and up to

10% of power generation

capacity in Romania

EUR ~2.3bn in 2013 (~11%

share of non-consolidated

budget)1

Largest investor

2013 FIGURES

Over EUR 1bn capex spent

per year since privatization

Largest contributor to

state budget


Petrom has transformed from an inefficient state-owned company

into a high-performing private company

HSSE3

LTIR4 0.33

Turnaround &

Operational

efficiency ROACE2 19%

Corporate

governance &

Culture

Transparency

and

performance

mindset

From... To... Impact

1 Bucharest Stock Exchange Code of Governance in adherence to OECD standards 2 ROACE as of 2013 3 HSSE: Health, safety, security and environment

► ‘State company mindset’

► Bureaucracy

► State interference in

commercial decisions

► Professional organization

► Two-tier management system

► Blue chip on BSE Code1

► A strategy incorporating

sustainability

► Focus on oil & gas core

► Stable production at 171kboed

with lower costs (~USD15/boe)

► Modern technology, facilities

and management systems

► Large non-core businesses

► Declining production and

aging underinvested assets

► Lack of management systems

► Security Management Plans

► > 1.5 day/employee HSSE

trainings

► Safety Day

► Lack of monitoring systems

► Low safety awareness

► Limited HSSE trainings

4 Lost time injury rate for 2013

compared with 1.11 in 2004


Petrom has benefited from an improved capital market environment

Free float increased in 2013

Share price appreciated by 9.7% YoY in 2013

Index Jan 2009 = 100

9.36%

18.99%

20.64% 51.01%

OMV*: Austria’s largest listed industrial company and

integrated international oil and gas company

Free float increased from 6.62% to 9.36% today

Property Fund: listed fund, ~90% of AUM invested

in the energy sector

State holding, but no golden share

Other 2013 highlights

*Shareholder since Dec 2004; ** Dividend yield plus share price increase in gross values (2013 vs 2012)

0

100

200

300

2009 2010 2011 2012 2013

BET

BET-NG

Brent

Petrom

► Petrom shares trading turnover: +40% y/y

► Total Shareholders Return**: 16%

► Institutional investors: +12.4% y/y to more

than 500


Financial performance in 2013

Exploration & Production

► First annual increase in hydrocarbon

production in Romania since privatization

► Continued focus on cost reduction

► Unfavorable FX effects and higher

depreciation expenses

Gas & Power

► Weaker gas and power demand

► Depressed electricity prices

Refining & Marketing

► Significantly higher refinery utilization rate

► Strong marketing performance

(4)%

(53)%

Clean CCS EBIT 2013 vs. 2012

in RON mn

>11x

2012

5,855

(289)

31 359

5,754

C&O and Consolidation R&M G&P E&P

167

5,542

2013

6,015

(68) 374


Evolution of financial indicators

Solid financial basis for growth and sustainable performance

Operating cash flows, RON bn

Gearing ratio, %

2009

2.7

2013

8.0

12

7.2

11

6.4

10

4.6

1

79

12

16

2009 12 10 11 2013

Capex / CFO ratio

151146134

9565

11 2009 10 12 2013

Operating cash flows / Capex ratio, %

ROACE, %

2009 10 11 12 2013

19.0 16.5 17.3

10.7

5.2


Business environment


Macroeconomic environment

Romania’s resilient economy continues to recover

Romania GDP continues to recover

-15

-10

-5

0

5

10

06

-10.4

7.9

2005

-8.6

4.2

10

-4.4

-1.1

09

-4.2

-6.6

08

-11.6

7.3

07

-13.4

6.3

12 2013f

-1.1

3.5

-4.5 -3.9

0.6

11

2.3

Source: IMF, WEO Database Oct 2013, NBR for GDP 2005-2012, INS estimates for 2013 * SOE = State Owned Enterprise

► EU member since January 2007

► Country ratings: investment

grade Moody’s (Baa3), Fitch

(BBB-) and S&P (BBB-)

► FX: in 2013 RON was relatively

stable against EUR (+1%) but

rose against USD by 4%; in

Q1/14 RON depreciated by 3%

against EUR and appreciated by

1% against USD

► CPI annual inflation: 2013

average at 4%, 1.3% at year-end;

2.8% (end-March)

► IMF support: a 2-year

precautionary agreement

approved in September 2013

► SOEs* privatization momentum

Current Account deficit, % of GDP GDP growth rate, %


Oil

Gas

Power

Regulatory environment

An investment-friendly environment is required to fully unlock growth

in the energy sector

Progress made Remaining challenges

Oil market is fully liberalized

Gas liberalization path: Energy

Law* stipulates deadlines for price

liberalization

Third Energy Package largely

transposed in the Energy Law

Stable and investment-friendly

fiscal & regulatory framework

Power market roadmap for

phasing out of regulated electricity

quantities part of Energy Law

Renewables support scheme

initially beneficial

► Renewables support scheme

Secondary legislation not fully

defined

► Coal power plants

EU environmental standards to be

implemented

► Demand and competition

* Law no. 123/ 2012


Gas price liberalization on track

Planned gas price liberalization steps1

1 Roadmap approved by Government decision for the increase of regulated gas prices during 2013-2014,

deadlines stipulated in the Energy Law

119120

0

19 18 17 16 15 14 13

RON/MWh

+96%

119

0

120

19 18 17 16 15 14 13

RON/MWh

+13%

Non-households Households

89.4

45.7 45.7

51.8


Petrom Strategy 2021


We aim to remain the leading regional, integrated oil and gas

company with sustainable performance to support potential upstream

growth in the neighboring Black Sea region

1 Development subject to confirmation of commercial viability 2 Updated

2021+

Position for long-term growth Enhance mid-term value

2016

Sustain performance

2014

B

A

2012

C

People. Develop a performance-based organizational

culture and skill pool to achieve business growth and

operational excellence

Resourcefulness. Develop a sustainability culture for efficient use of

natural resources, high safety and environmental standards and

share value with stakeholders for common long-term growth

E&P

G&P

R&M

Stabilize production through

field redevelopment, drilling,

workovers

Continue with operational

excellence

Optimize E&P portfolio

through partnerships

Bring Brazi CCPP on stream

Enhance value of equity gas

by strengthening gas sales

Modernize/improve efficiency

of Petrobrazi refinery

Revamp fuel storage

network

► Increase ultimate oil and gas

recovery

► Explore, appraise and start to

develop1 Neptun (Black Sea

deepwater)

► Explore deeper and

frontier hydrocarbons

► Explore additional opportunities

in the neighboring Black Sea

► Explore unconventional

opportunities

► Explore infrastructure needs

related to equity gas (Black Sea)2

► Explore development of a potential

Gas Hub, incl. from the perspective

of capitalizing on new discoveries

► Optimize across commodities

and leverage fair market conditions

► Enhance value of integrated

downstream (e.g. operating model)

► Optimize R&M portfolio

► Explore partnership

opportunities

PETROM STRATEGY AS OF 2012


Business overview


Health Safety Security and Environment (HSSE)

Safer operations

Fatality rate in Romania reduced by 80%

since 2008

Petrom LTIR substantially improved2 (0.33

in 2013 better than international benchmark)

People more intensively trained in HSSE,

which has become part of our corporate DNA

(mindset and lean processes)

E&P LTIR1 Romania Significantly improved in 2013

0.48

0.600.53

0.63

1.11

0.0

0.8

1.6

’11 ’10 ’09

0.70

2008

> 50% reduction

2013 ’12

1 Lost time injury rate (employees and contractors) 2 LTIR for Petrom Group, excluding Kazakhstan


Key facts Exploration and production concessions

Proved mn boe, eoy

Romania

Kazakhstan

Total

707

21

728

2013 FIGURES


Petrom footprint is concentrated in Romania

Romania

► Existing blocks/fields: 10 assets with 239

commercial oil and gas fields (~45/55%

oil/gas mix) and ~9,000 operated wells

► Exploration licenses for 9 onshore and 3

offshore blocks

► Recovery factor: oil ~25%; gas ~49%

► RRR1 at 48% (2012: 61%)

Kazakhstan

► Petrom entered Kazakhstan in 1998

► Production in 2013: 11.2 kboe/d

1Reserve replacement rate (3-year average)

Reserves Proved and

probable

977

48

1,025


Group production, kboe/d


First year of increased production in Romania,

while containing production costs

2013

171.4

11.2

12

170.5

12.2

11

173.7

12.0

10

173.9

9.9

09

180.8

6.3

08

188.5

5.7

2007

192.5

4.6 ► Production was stabilized by

accelerating workovers and drilling,

deploying state-of-the-art technologies

and partnerships

► Production enhancement contracts

(PEC) for small fields with partners

Romania production costs, USD/boe

18.0

2007

16.8

2013

15.0

12

14.9

11

15.9

10

16.1

09

14.6

08

► Operational excellence for mature field

operations being deployed throughout

assets to contain production costs

► Examples:

► - Modernization of facilities and equipment

► - Reduced mean time between well interventions

► - Automation of metering points skids, parks,

wells and data acquisition

Romania

Kazakhstan


Mid-term production

FRD projects to unlock growth potential

Development

11 FRDs in development phase

12 FRDs in appraisal phase

FRDs aim at maximizing ultimate recovery

► EOR/ IOR (water, steam, polymer injection)

► Additional drillings and workovers

► Modernizing operations

► 2P reserves of 100 mn boe

► Peak production: 17 kboe/d

► Investments: EUR 550 mn1

Examples:

► Suplac: In-situ combustion and cyclic steam

injection ► Drilling of up to 87 new wells and

modernization of the facilities until 2016 ► Ensures 10% of the total oil production of

Petrom in Romania ► Independenta: Identify and develop the

underdeveloped areas

► Cumulative potential production of 200-250 mn

boe, coming on stream 2014-2017

Examples:

► Bustuchin: drilling additional wells and upgrading surface facilities

► Phoenix: infill drilling and water injection

1 Cumulated FRDs; forward investments; data as of end-2013

Suplac

Independenta

Tazlau

Lebada

East

Istria

Burcioaia

Oprisenesti

Phoenix

Bulbuceni

Madulari

Videle G2


Black Sea exploration and production

Strong position in Black Sea for future growth

Ukraine

Romania

Neptun Deep

► OMV Petrom (50%), ExxonMobil (Operator 50%)

► Domino discovery in 2012

► 3D seismic completed (~6,000 km2 ); processing

seismic

Neptun Shallow (100% operatorship)

► 3D seismic completed; 3D seismic data processing

is ongoing

XV Midia Block

► OMV Petrom (42.5%), ExxonMobil (Operator

42.5%)

► Transfer of the 85% participation to ExxonMobil and

OMV Petrom approved by the Government

Skifska

► OMV Petrom part of the consortium led by

ExxonMobil

► PSA negotiations on hold


Black Sea exploration

First exploration well in Neptun Deep highly successful

Specifications

► Domino-1: first deep water

(~930 m) exploration well, total depth >3,000 m

below sea level

► Gas discovery: preliminary estimated resources

1.5-3 tcf (42-84bcm; 250-500mnboe)

Progress

► 3D seismic survey (~6,000 km2 operated by

CGG Veritas) completed in Q2/13

► Processing of 3D seismic data is ongoing

► Following seismic data interpretation, a new

drilling campaign is anticipated to start around

mid-2014

► Ocean Endeavor drilling rig currently being

prepared for Black Sea operations

Ocean Endeavor drilling rig


Gas

Power

Gas & Power

Lower contribution due to challenging gas and power markets

Petrom net output

TWh

Power price

RON/MWh

197 275 262

221

0

200

400 3.0

1.5

0.0

2013

156

2.9

2012

217

1.7

2011

0.3

Gas sales, bcm

4.94.85.14.94.8

0

5

10

15

2013

12.5

12

13.6

11

14.2

10

13.8

2009

13.1

Baseload Peakload

Petrom gas sales

Other*

*Other domestic producers and imports

► Total gas consumption in

Romania down by 8% in 2013

► Petrom consolidated gas sales

slightly higher than in 2012

► Gas price liberalization positive

effects reflected in E&P

► Domestic electricity

consumption decreased by 5%

(production down 2%)

► Power prices down by 28%

► Brazi covered 5% of domestic

power production in 2013


Refining & Marketing

Good operational performance with high refinery utilization rate

374

31152

(104)

(675)-750

-500

-250

0

250

500

11 10 2009 12 2013

Clean CCS EBIT, RON mn

Petrobrazi refinery utilization increased; fuel & loss

on a downward trend

9073797067

1011111313

0

50

100

5

10

15

20

2013 11 12 10 2009

Refining & Marketing positively contributes to

Petrom results

► Strong operating profit despite margin

pressure

► Highest Petrobrazi refinery utilization

rate since privatisation

► Incremental improvements in product

yield structure

► Increased energy efficiency

► Retail volumes constant in Romania,

despite competitive market

► Focused cost management Petrobrazi utilization,% Fuel & loss, %


Financial performance: Q1/14 results


Q1/14 overview

Clean CCS EBIT, RON mn

(15)

2

Q1/14

1,477

(10) 75

39

1,372

Q1/13

1,579

(29) 52

155

1,417

-6%

Production at 181.8 kboe/d RON 1% stronger vs. USD and 3% weaker vs.

EUR Average Urals crude prices of USD 107.42/bbl Gas sales volumes of 13.47 TWh (1.25 bcm) Net electrical output of 0.58 TWh Deteriorated refining margins due to lower product

cracks Strong marketing result due to stringent cost

management

Cons

Co&O

R&M

G&P

E&P


Economic environment

109

3.27 3.29

100

105

110

115

2.4

2.8

3.2

3.6

Q1/14

107

Q4/13 Q3/13 Q2/13 Q1/13

Average RON/USD (right/scale)

Average Urals price in USD/bbl (left scale)

15.415.2

21.920.9

39.839.8

0

15

30

45

Q4/13 Q3/13 Q2/13 Q1/13 Q1/14

-6

-4

-2

0

2

Q2/13 Q1/13

-0.88

Q3/13 Q1/14

-2.41

Q4/13

Indicator refining margin (USD/bbl)

1 Import gas prices represent ANRE assumptions

Oil price (USD/bbl) and FX (RON/USD) Gas prices (USD/MWh)1 Indicator refining margin (USD/bbl)

Average import gas price in Romania

Domestic gas price in Romania (for non-households)

Domestic gas price in Romania (for households)


Results in Q1/14

1,080

1,328

-19%

Q1/14 Q1/13

Clean CCS net income attribu-table to stockholders (RON mn)

Figures in this and the following tables may not add up due to rounding differences 1 After deducting net income attributable to non-controlling interests 2 Adjusted for exceptional, non-recurring items; clean CCS figures exclude special items and inventory holding effects (CCS effects) resulting from

R&M

in RON mn Q1/14 Q1/13 ∆

EBIT 1,472 1,582 (7)%

Financial result (132) 2 n.m.

Taxes (265) (252) 5%

Effective tax rate 20% 16% 24%

Net income 1,075 1,332 (19)%

Net income attributable to

stockholders1 1,075 1,330 (19)%

EPS (RON) 0.0190 0.0235 (19)%

Clean EBIT2 1,472 1,623 (9)%

Clean CCS EBIT2 1,477 1,579 (6)%

Clean CCS net income

attributable to stockholders1,2 1,080 1,328 (19)%

Clean CCS EPS (RON)2 0.0191 0.0234 (19)%

Minorities (0.43) 1.45 n.m.


CAPEX and EBITD

20999155

2

EBITD

2,284

77 0

1,987

CAPEX

1,249

1,084

Cons

C&O

G&P

R&M

E&P

Q1/14 (RON mn) Key investment projects for Q1/14

► E&P: drilling, workover activities &

sub-surface operations and surface

facilities, field re-development

initiatives as well as investments

related to Totea Deep project

► R&M: Petrobrazi refinery

modernization, 3+3 terminals

strategy1, efficiency projects and

environmental compliance projects

1 3+3 terminals strategy = streamlining the storage network

to 6 terminals: 3 greenfield and 3 revamped


Management agenda 2014


Management agenda 2014

► Maintain production stabilization

► Exploration activity in the Black Sea

► Finalize Petrobrazi modernization

► Continue dialogue with authorities on

taxation and regulatory frameworks;

impact on investments

► Address gas and power market

challenges

► Shareholders return

31 | Petrom Group

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