OMV AG

David Davies – Deputy Chairman of the Executive Board Rainer Seele – Chairman of the Executive Board; Chief Executive Officer Jaap Huijskes – Executive Board Member Manfred Leitner – Executive Board Member

Thank you and good morning, ladies and gentlemen. Just a brief word of introduction from my side, as a courtesy from a familiar voice to somebody who is not so familiar.

Starting our presentation today will be our new Chief Executive, Mr. Rainer Seele.

And, without any more ado, I'd like to hand over to him to kick off the presentation and we'll join you later. Thank you very much.

Rainer?

Good morning, ladies and gentlemen. I am delighted to be here with my Board colleagues and we are ready to present our quarterly and half-year results.

Before I'm going to start, let me introduce myself with a few words. By profession I'm a fully trained chemist and that's the reason why I also started my business career with BASF, the leading chemical company in the world.

I look back to a 20-year business career with BASF and I was, in my position, in charge of the oil and gas division of BASF Group, which is the Wintershall AG. Wintershall is the largest oil and gas company in Germany and I managed, in my time as CEO of the company, to grow the company from 280,000 barrels per day to 380,000 barrels per day.

And, in parallel, we doubled the net profits. So I think I am well prepared to show up, hopefully, the same kind of development also with OMV.

But before I am going to start talking about numbers, I would like to start with our HSSE track record, because first things come first and HSSE stands for our license to operate. That's why it's so important and has the highest priority in our Company.

As you can see on the chart, we have improved our safety track record quite substantially. The LTI rate went down from 0.7 to 0.3, but that's statistics.

I think, we have to continue to work further to bring that LTI rate down. Our target is, of course, zero, which is a challenging target but in some regions we can show up that this is possible and we have to think how much we can do also in OMV Group.

On the next chart you can see the business environment, which is explaining a little bit what is really the major challenge and what is also in the press. It's the decline of the oil price.

You can see in that upper chart that the oil price nearly halved within a year. The reasons are all familiar to you.

We are now below the $50 per barrel and that's the reason why our Fit4Fifty program, which stands for an EBIT enhancement in the cost-reduction program, should be realized as planned. It's very, very important that we are going to increase the competitiveness of OMV Group and this is nothing else than reducing our cost bases.

I'm really making that a key point because I think that our industry will change a little bit. That we are not competing on growth; that we are competing on costs in the future.

And that's the reason why it's very, very healthy for OMV that we use this environment to strengthen, especially, our cost competitiveness. And, from my point of view, if I look in all the key KPIs for our cost development, there is some room left for improvement.

Well, if we look on the oil price development, of course the main question is how does that develop in the second half? Well, honestly, I cannot see any fundamental data convincing me to give you a positive outlook.

I think the times of the high oil prices of $100 plus are over. We have to deal with the situation that we have a misbalance in the market.

Supply/demand are really not fitting each other. There is too much oil in the market.

You can see that this is something like 2 million barrels per day. This is just the overrun of the OPEC target.

So, although OPEC is not the only reason why we do see the oversupply, you know the story about the shale oil production in the U.S. Looking into the gas markets, I think, they will remain difficult for us.

We do see very low trading margins in natural gas. The same story I can repeat that we do have an oversupply of natural gas in the markets and that's why I think the trading margins will stay low.

As you can see on this chart, the prices are something around €21 to €22 per megawatt hour, which is, for summer, not a bad price level. And that's the reason why we have, because we have to refill the storage capacities, we have seen a pretty normal winter in the first half.

That's the reason why we have seen high withdrawal rates on the storages and now the storage capacities are being refilled. We do see a very stable, good contribution from our transportation and storage business.

So what we see in the natural gas trading is really an urgent need to think about our trading business; what kind of strategy we would like to follow. And I will come back to that.

The red line is the line of hope. Yeah, and what you can see is the development of the refining margins.

Pretty nice development. Well, was that man-made?

I don't know. It was, of course, in the first instance, also a cost-cutting program we have every year in our refineries.

So we think that the refineries are well positioned, also now a benchmarking analysis. We do have now a level about $7 to $8 per barrel as the refining margin because we are really enjoying the lower feedstock prices for our refineries.

Does this stay forever? Definitely not.

In our outlook, I think, we won't stay on the current level. It will go in second half down to a normal level.

On the next chart there is summarizing that OMV improved their financial performance in Q2 2015. Well, David will next talk a bit more in detail and will specify all the numbers.

I only give you a broad overview. The EBIT before special items increased in second quarter from €333 million in Q1 to €375 million.

And downstream oil contributed more or less at the same level; you see €260 million and €269 million. Whereas upstream in second quarter could contribute a bit more; something around 25% of the EBIT generated in Q2, just because the oil price was higher in the second quarter and, of course, we have seen a higher production.

As we speak about half-year, the production level more or less is the same like the previous half-year; at something around 304,000 to 305,000 barrels per day. But we have also outperformed the previous half-year because the performance from the downstream business is much stronger than being reflected in the EBIT because the very, very impressive development of Borealis is shown in the clean CCS earnings per share.

You can see that the earnings per share from Q1 to Q2 went up by 50% In Q2 its €1.11 per share. So that's a very, very strong improvement.

Also, if we compare to Q2 2014 to our Q2 2015, you see that the earnings per share went up by 80%. So the bottom-line performance, which is reflected in the EPS in Q2, is much, much better than what you can read in the EBIT structure.

My major headache, if we look on that chart, is the free cash flow because Q1 was a real challenge for us with €570 million minus. For Q2 I show you the free cash flow before dividend, because before dividend it's more reflecting the positive business development we have seen in the second quarter.

And, as you can see, we have turned back to a positive free cash flow of €97 million. And we expect that the free cash flow will remain positive also in the second half of the year if we see a similar business environment like in the first half.

We keep our targets to be broadly cash-flow neutral after dividends mid-term. All in all, the market environment with low oil price is still a challenge but we see an improvement of all three KPIs.

I will concentrate, together with my team, on cash flow management and bottom-line delivery. What is making us busy in the second half of the year is really the definition of the new strategic framework of OMV as a company.

As we have improved our quarterly performance, we are now reviewing the business unit strategies; all three of them. At this early stage I really would like to ask your patience.

We think that we will finish our review on the strategies until year-end, so that we are going to present it to you latest early next year. But some indications I would like to give you.

Short term, we will go for an EBIT-enhancement program also to improve the cash flow. The cash flow management and profitability will be the key.

And it's nothing else than executing the Fit4Fifty program so that we deliver what we are promising you as cutting costs and improving the cash flow. Mid-term and long term, we will continue to have an integrated business model.

Especially what you can see in the quarterly results we are presenting to you is that the natural hedge works nicely in today's low oil price world. But I have to say that only oil downstream is hedging our lower EBIT results in the upstream.

We have to concentrate on the gas downstream business. That's the strategy we are working on first.

And we will also try to execute as early as possible the new natural gas strategy because it's not satisfying us that we are not generating profit in the business of natural gas downstream, especially in trading, as I have mentioned earlier. But you should not expect the revolution coming up with the review of our strategies.

It will be an evolution of the strategy. We will update and upgrade this strategy.

We will come up new targets. That's for sure.

But we have to work on that to have the total picture until, as I said, the yearend. We will keep a focus on upstream growth.

That's the growth story also coming with the new strategy. So upstream will be in the focus but it doesn't mean that downstream is only the cash-producing machine, which we will use to reinvest in upstream.

Majority, yes, but we will also keep our refining and marketing in gas downstream business competitive. One development you have seen in the recent past is already reflecting a change in our strategy.

And that's the cooperation with Gazprom along the entire value chain. So we have an interest work importing natural gas from Russia to Austria, which looks back to nearly 50 years of a business relationship we have built up.

So we want to cooperate also investing together into export pipelines. You have seen in the press it's going to be a pipeline running through the Baltic Sea, so doubling the capacity of Nord Stream I, will have the name Nord Stream II.

It's the same capacity of 55 bcm. The main strategic interest of OMV is that the gas landing at the German coast will find its way to our central hub in Baumgarten.

Because the gas flow via the Ukraine is being diminished in such a concept that Gazprom might not go for the same volume to prolong their transportation contracts in the Ukraine, we have to make sure that the new routing of gas from Russia will find its way to Austria. So the remaining component is the cooperation between Gazprom and OMV in Siberia.

It is an interesting field, which we are discussing to get access with Gazprom. It’s the third largest gas reservoir of gas field you can find in the Russian federation.

The field has a name Urengoyskoye, they have different layers, right now they are producing from the sediment layer, that we have an interest to work together in the Achimov formation in the layer there. It will be a very interesting area for us for three reasons, one, the acquisition costs in Russia, also given the current framework, are relatively low.

Second, the producing, the development costs, given the fact that we also have a very low weak ruble and the investment will be done on a ruble basis, also compared to other reasons relatively low. And the operating costs, again there is a currency effect, but it is also an effect of operating a scale, because it is a very large field.

Also the operating costs are pretty low. So that is the economic attractiveness coming with that and this will be part of our strategy.

So we’ve signed a memorandum of understanding, giving us the framework and we will speed up to have binding agreements with Gazprom, as early as possible. So now I will hand over to David, thank you very much.

Thank you, Rainer and I will start with the overview of the quarter’s results if I may. If you look on the slide, which I have numbered eight, hope it is the same for you the Q2, 2015 highlight.

You see as Rainer has mentioned a number of times, the balance between the upstream and the downstream clearly are extreme performance benefits – sorry it has been punished by the lower oil price 44% down with Brent being on average during the quarter $62.00 a barrel. It’s partly compensated by stronger dollar, compared to last year.

as you will remember, and also the fact that our production is higher by 3%. And, indeed, our sales were higher, particularly in Norway.

But nevertheless, it’s not been able to fully compensate – being compensated by the strong downstream performance $198 million improvement, compared to last year is very close to improve and clearly the strong refining margins in particular have been the major driver of that, although not alone. Our marketing business has performed well, as has our petrochemical business.

You see here also a contribution of $41 million from corporate and other our corporate customer all lower, following our cost reduction program. But the biggest part of the change here is that in this block, we eliminate the intercompany profit between upstream and downstream, predominantly in Rumania.

And of course the current oil prices the amount of profit what it needs to eliminate is clearly a lot lower, hence the improvement quarter-on-quarter. So for the quarter as a whole we achieved a clean CCS EBIT of €375 million against €369 million last time.

Our gearing at the end of quarter 2 finished at just under 40% so clearly some way above our long-term target of 30%. And you'll be aware that last night we also announced our intention to issue a hybrid bond of at least benchmark size.

And the reason we're doing this is clearly to just ensure that we maintain our flexibility during this particularly difficult period as regards the oil price. And that you can see clearly on the next chart, a chart you'll be familiar with.

The oil price declined to $62 in quarter 2 from $110 last year is clearly reflected improved versus quarter 1 but, clearly, we're still a long way down of where we were a year ago. The oil price is down by 44% quarter-on-quarter but the foreign exchange rate has improved in our favor by 19%.

So that helps compensate the decline partly. But, clearly, the full compensation has not been reflected here.

Then the next chart in the middle shows you the gas price. The yellow line is the price that we realized in our hub here in Austria.

So very much reflective of the Western European price €21 per megawatt hour in quarter 2, coming down, as one would expect, from the winter quarter. The orange line is the price of gas that we realized down overall in the upstream.

And the largest part of this, of course, is the gas price in Romania; hence the line being considerably lower than the yellow line. Clearly, the market has liberalized quite substantially over the last few years but there's still some way to go.

The reason we saw an increase in quarter 2 against quarter 1 is that the private household price is still heavily regulated and quite a way below the industrial price. And included within that categorization is the district heating, which clearly was much higher in quarter 1 than it has been in quarter 2.

So their volumes going down has helped the average price improve somewhat. The chart on the right-hand side shows the very strong increase that we've seen over the last five quarters in the refining margins, from $1.90 back in quarter 2 last year to now just under $8.

A $1 of this increase in quarter 3, in particular, was due to the recalculation of the yield following the improved position of the refinery in Romania, Petrobras. But, clearly, the market has been driving the biggest part of the increase as we've moved up to $7.80 for the quarter just ended.

And you see that, of course, reflected in the refining and marketing results. Coming to the next chart, clean CCS net income attributable to the OMV stockholders has improved quite substantially, up from €202 million to €364 million; an 80% increase.

And this, clearly, is also reflected in the clean CCS EPS per share, which at €1.11, almost fully covers the dividend that was actually paid out in the quarter of €1.25. So an 80% increase there.

Going further up the chart, on the right-hand side, the financial result has been the biggest reason for the improvement that you see in profit from ordinary activities. On a reported basis, €92 million profit against a €14 million loss.

And, of this, €75 million was due to a much stronger performance from Borealis. So a very strong performance contributing there.

That's also helped the effective tax rate, which, at 7%, was quite a way down on the 20% that we had last year. Clearly, the fact that we only bring in Borealis' net income into the profit from ordinary activity, so it's already been taxed, as it were, so it doesn't need to be reflected in our tax rate, that drives the tax rate down.

And, of course, the environment that we're currently experiencing, where our downstream is relatively low taxed in Austria, 25%, and in Romania it's 16%, for example. Whereas upstream, clearly, typically carries a higher tax rate and the upstream profits are clearly lower.

Also, losses that we're incurring, given this low oil price in our Norwegian production, are also being relieved at a very high tax rate. So that further drives the tax rate down.

At this point in time, we would certainly expect our year-to-date tax rate at the end of the year to be in single digits. Minorities are higher than last year.

This is due to an improved performance from Petrom; €83 million deducted as opposed to €43 million in the period last year. Coming to the next page, special items, there's only really one of any significance.

The clean CCS gains are clearly part of this reconciliation. But, as regards special items, we booked €205 million this year as a provision against the profitability of the Samsun power plant following five or six successive quarters of very low margins, which have actually put us in a position in Turkey of not actually operating the plant for long periods of time.

On the next chart you see the cash flow. I think Rainer has talked quite at length about this being a very important focus for us; clearly, bringing the cash flow into a neutral position.

The first quarter was very difficult. Clearly, we were standing on the brakes very hard as the oil price declined, as we were cutting our costs and our CapEx.

But the effect of that we couldn't really get to kick in really in quarter 1. What you also saw in quarter 1 was cash flow in investment activities reflecting the fact that we were paying for charges that were incurred in the previous year as well.

But now we've been really able to get a strong brake on the spending, as it were. And you can see in the second half of this chart, on the left, the graph that our free cash flow before dividends was actually positive in the quarter.

So our operations have now generated cash in quarter 2 €97 million against over €500 million negative in the first quarter of the year. Clearly, in quarter 2 we paid the dividend.

€530 million went out in the quarter. So, overall, the quarter produced a negative free cash flow after dividends.

And year-to-date we're at €905 million, but with a more stable position now for the second half, depending, of course, on what ultimately happens with the oil price. As I said, in quarter one we should be able to see a much stronger position in the second half.

And I would hope that we'd be able to deliver a positive cash flow for the second half of the year. On the next page, you see where we've been spending our money.

Clearly, at €1.4 billion, the lion’s share continues to go into the upstream, €1.2 billion, the lion’s share continues to go into the upstream, €1.2 billion. We continue to execute the developments in Norway; Aasta Hansteen, Gullfaks and Edvard Grieg.

That's just over one-quarter of the total amount that we've spent in E&P. A similar amount was spent in drilling, workovers and field redevelopments in Romania.

Capitalized exploration during the first half of the year was just under €170 million. We've also invested in completing the Maari Growth project in New Zealand, which cost a further €60 million.

And a similar amount was spent in Schiehallion on the ongoing redevelopment there in the UK. So they are the key items that we've been spending the CapEx on in the first half.

The green block shows you the amount that we've spent in the downstream, €184 million. The majority of that relates to contract renewals in Petrol Ofisi in Turkey.

Our investments of €1.4 billion stays against a total EBITDA generated year-to-date of €1.8 billion. Coming now to the results of the upstream business.

On the left-hand side, you see a reconciliation between what our profit was in quarter one this year versus quarter two. Why have we improved?

Clearly, realizations have been stronger; generated €157 million. And this, clearly, is due to the oil price in quarter two averaging $62 against $54.

We also saw a minor strengthening of the dollar against the euro, which further helped. But the biggest chunk of the improvement has come from realizations.

Volumes were also higher. This, in particular, due to Norway, which compensated the decline in Yemen because, clearly, our production ceased in quarter two.

We still did have some production in quarter one. We also saw an improved volume from New Zealand as the Maari Growth project came on stream.

Exploration expenses were higher in quarter two versus quarter one. We wrote off an appraisal well in the Wisting block in Norway and also had a write-off of €22 million in the Black Sea in Petrom.

So that was worse than quarter one by €47 million. And, clearly, with more production coming in from Norway and New Zealand, then, correspondingly, we had the depreciation associated with that.

So hence we were down by €55 million. So that takes you from Q1 to Q2.

Doing a similar reconciliation from Q2 last year to Q2 this year, the picture looks quite different. The real reason for the decline is, obviously, principally driven by the lower realizations.

I've no need to talk any more about the much lower oil price, clearly. Volumes are slightly higher.

Exploration expenses, Q2 this year versus Q2 last year, were much lower. We had a number of exploration expenses written off last year.

DD&A coming on stream for the same reasons that I explained a few moments ago. So, clearly, realizations have been very positive reconciling Q2 to Q1 but negative reconciling Q2 this year to the same quarter last year.

The next chart shows you what's been happening to our production. Our production has increased slightly, from 297 kboe/d up to 307 kboe/d.

Norway, the Gudrun field has ramped up, following the technical issues that we had in the first quarter of this year. And, as I mentioned already, bringing on wells from the Maari field in New Zealand.

The shut-in in Yemen has impacted negatively by about 6,000 boe per day. But, despite all of those difficulties, it's reassuring to be able to actually increase our production slightly.

What's also very reassuring is the trend in operating expenses were down from just under $18 to around $30.60 by quarter 2 of 2015. A large part of this has undoubtedly been due to favorable foreign exchange effects, if you look over the year.

Volumes have also helped. But, clearly, strict cost management has also been a major part of this improvement.

You see that, in particular, on the next chart, which shows the same position in Petrom, where our operating expenses per barrel have gone down from $18.70 to $13.16. Again, here you're seeing about $3 of that due to the foreign exchange but a huge chunk of it is also due to very strict cost management, which has helped us bring our cost down quite substantially.

Reassuring also is that, with one or two variations up and down, our production has remained relatively stable compared to last year; in fact, we're slightly ahead. And, compared to the previous quarter that was slightly down.

But nevertheless, more or less balanced. Then turning to the downstream briefly.

Q2 last year we generated a CCS clean EBIT of €71 million. This quarter this is €269 million.

So a big step up, the lion's share of which has clearly been due to the much stronger refining situation, which we've talked about a number of times. Manfred will no doubt say a little bit more about that in a moment.

The marketing business has also performed well. Marketing volumes down by 3% due to the missing Bayernoil volumes, but overall retail volumes are up by 8% across our markets.

Margins have also held up quite well and this has all contributed to a much stronger performance. Gas, on the other hand, had a slightly weaker quarter than the same period last year; due predominantly to a number of the provisions that we booked for doubtful receivables in Romania and in Austria in our gas business.

Key performance indicators in the downstream business. Overall, our refining utilization rate is at 92%.

It's up by 8% compared to the same quarter last year. The big increase here, however, is due predominantly to the fact that in the same quarter last year we were undergoing the turnaround in Petrobrazi, hence the utilization in the East at 59%.

That then in the East increased quite substantially in Q3 and Q4 as we processed the inventory of upstream production that we’d built up during that period and now it’s more normalized into the 80-s-%. But, overall, particularly in the West, the improved utilization means that at 92% we certainly feel we’re above the European average and, clearly, able to profit from the very strong refining margin environment.

The sales volumes in marketing slightly down. I’ve mentioned that already.

The Borealis contribution. Similarly, we talked about €127 million in the second quarter, much stronger there than last year’s €51 million, so benefiting there from the strong petrochemical margins, which I’ve already talked about.

Natural gas sales volumes, the decline here continues, unfortunately. Comparable volumes at the same quarter last year are down by 14%, with weak market demand and overall lower sales to the industrial customers in Austria, Turkey and in Romania.

Our CapEx and cost-reduction program is progressing well. We’ve a target of spending this year approximately €2.7 billion.

That’s a 30% reduction on last year’s spend. We still maintain that guidance.

We believe we’ll be close to that number. We also are targeting to reduce our exploration and appraisal expenditure by up to €200 million during the current year.

That would be somewhat more of a challenge but, nevertheless, that remains the target and that will be something which we repeat over the next two years as well, as we look to focus on managing that cost down. Our annual operating cost and overhead cost is targeted to come down by about €150 million and we’re making good progress towards that across the business divisions, as well as in the corporate center.

Headcount reduction program is already in place. We’ve taken more than 500 employees out of the headcount since the end of last year.

And, as we’ve also mentioned, the review of our non-core assets is a process which is continuing and that, we believe, will also lead to some disposals. Now, as we look at the outlook for the current year, our full-year expectation for the average oil price is between $50 and $60 per barrel.

We expect refining margins, although they’ve been strong in the first half of the year, to decline somewhat. Marketing volumes are expected to be supported by the overall lower product prices.

The gas market will remain challenging. There’s very little doubt there, unfortunately.

Our production is on target to hit our guidance at the beginning of the year of approximately 300,000 boe per day, assuming no further contribution from Yemen or from Libya. CapEx about €2.7 billion, of which the majority clearly will be in the upstream.

And our E&A expenditure, we’ve actually tweaked this up slightly. I mentioned this was a challenge.

We actually had previously had guided to €500 million. We’re now expecting this to be closer to €600 million.

Then just finally, before I hand over to Jaap to talk about the upstream, the financial priorities 2015 to 2017. Cash flow over these three years.

Our target is clearly to bring the business into a position where after dividends we can maintain a broadly neutral free cash flow so we're no longer increasing our debt, as we have done so far in the first half of the year. The dividend.

Our long-term goal is to maintain a payout ratio of 30%. The dividend that we paid out during quarter 2 based on last year's profit was €1.25.

Rating is very important to us. We're maintaining a strong investment grade credit rating.

One of the reasons we're issuing the hybrid bond is to actually give us more flexibility around this as well. A strong balance sheet in the medium term, reducing our gearing ratio by closer to the 30% long-term target and keeping the Group's liquidity position in its current comfortable state.

These are the major financial priorities. At that point let me hand over to Jaap, who'll give you an update on our upstream business.

Thank you very much

Thanks, David. Good morning from myself as well.

Let me quickly run through some of the key highlights. The numbers have been mentioned by both Rainer and David.

I I'll try not to repeat the same messages. Nevertheless, though, I start with the OpEx.

And you've seen the reduction. You've seen some of the underlying push quarter to quarter.

Very strict cost management across the board but, in particular, in our managed operations in Austria and Romania where we've got full influence over what happens. You see that really starting to pay off.

We're confident we can keep at the same sort of level over 2015. I'm also confident further out, given a lot of the cost measures that we're implementing this year.

Of course, you're only seeing part of the impact this year. You should see full impact of those activities next year.

And, therefore, these measures that we're implementing are clearly sustainable and will protect our OpEx going forward. Production.

Again, you've seen this in the previous slides with David and Rainer as well. You see the Q2 performance, 307 kboe/d slightly up on the quarter.

Our guidance for the year remains at about 300 kboe/d. That's because in the third quarter we have got some planned shutdown and turnaround activities.

We're coming to the end end, as we speak, on a major workover program of two very big gas producers in Romania, where we've had to do some integrity work, over work And we're also starting the offshore shutdown season in Norway; again, planned. All of that will see us dip production in the third quarter slightly for it to pick back up in the fourth quarter.

And for the year we continue to guide about 300 kboe/d. That's not assuming any return of Libya or Yemen for the rest of this year.

Positive contributions also mentioned earlier on New Zealand. The Maari Growth project's now finished.

The rig has departed very early on in the third quarter. And it's one example of many where activities during the year are coming to a halt and also illustrates why in the second half of this year we expect the CapEx to be less than in the first half of the year.

Many activities are stopping but, of course, it takes time to halt activities. It takes time to demobilize drilling rigs, et cetera.

It takes time to complete projects. As we do that, CapEx burn rate will reduce during the course of this year.

With that, to the next slide on projects update. It's satisfying to see that by now we've only got one artist impression left on this picture.

That's Aasta Hansteen at the top. Edvard Grieg has seen a major progress during the quarter.

The platforms, in fact, been now installed offshore and the hookup program is continuing. Operators doing a good joband then they continue to be quite bullish on starting up at the end of this year.

We've always assumed 2016 and we continue to predict the platform to start up early next year. Late this year, early next year, it doesn't matter.

The project's on schedule and about to come on stream. Schiehallion.

Good progress in yard. Good progress offshore this summer season as well.

Operator again targeting to have Schiehallion on stream in 2016. We are a bit more conservative and predict 2017, but good progress on the project.

Gudrun we had an outage. We talked about that in Q1, where we had a process pipe failure in the first quarter leading to an outage that's been rectified.

Drilling of production wells is progressing but, effectively, the platform is running at capacity. Gullfaks.

Lots of infill-type programs, but also satellite developments coming on stream. Gullfaks South is now on stream as of the end of July and not yet at plateau; further wells to be bought on stream.

And Rimfaksdalen, another satellite program, is progressing; projected to be on stream in two years' time. The final picture you see there is Nawara, the gas project in the south of Tunisia, which is progressing, albeit Tunisia, and you've seen this in the news, of course, is rapidly becoming also quite a difficult place to operate.

So far so good. We've not been touched by any of the unrest in Tunisia but, clearly, it's not as easy as it looks on first inspection to operate in the south of Tunisia.

On exploration, Slide 26. David's already mentioned that we have adjusted our estimate for the year to €600 million.

That's not because we want to spend €600 million. We're clearly targeting to spend €500 million, which would have been a significant reduction from the previous year.

What we're seeing here is similar to CapEx. We see it takes time to ramp down activities.

It takes time to work rig commitments out of program. And in many cases, of course, partners have got similar rig commitments where, at occasion, we get voted into activities by partners where you have no choice but to go along.

The other key activity, of course, that's ongoing is the drilling in the Black Sea where, together with Exxon and Petrom, we’re committed to have a drilling campaign that will last to roughly the end of the year. And in that drilling campaign we’ve so far completed four wells and we aim to continue drilling for the rest of this year.

But then, of course, expenditure will run down rapidly into next year there too. The increase this year is not something we aimed for.

And you will see later on in the year a further reduction in exploration reflected in our projected spend in 2016 and 2017. That’s also partially to make up for the over run in 2015.

On success rate, it’s actually a very good year. So far in the first half of the year we’re running at close to 60% success rate.

In particular, in Romania we’ve seen both offshore and onshore. Further discoveries in Norway.

We’ve seen satellite discoveries too Edvard Grieg.Austria, small gas discovery that we’re projecting to bring on stream early next year. And also in Tunisia we’ve some smaller oil discoveries.

If we look at our priorities, safety wasn’t one of my slides. Rainer started with that and, clearly, that’s where our priorities start.

But then rather than production it’s really cost that’s now our key second priority. Operational efficiency, as reflected in both uptimes but then also, clearly, our operating cost is key to our cost performance this year but also going forward.

And, as you see reflected in the numbers, we’re managing that very tightly at the moment. CapEx.

You will see us ramping down capital spend in the second half of this year reflected by activity programs, projects, etc., ramping down or coming to completion. And on production you’ll see us focusing on clearly sweating our assets but also delivering our post-FID projects, in particular the key six that I described on the previous slide.

With that, I’ll hand over to Manfred

Thanks, Jaap, and hello to all of you from OMV downstream. Let’s go to page 29 where you see that downstream delivers reliable results and substantial free cash flow.

On the left-hand side of this graph we have reflected downstream clean CCS EBIT development over the last 3.5 years. And you see here that the first two quarters in 2015 have been significantly high, almost close to a yearly result.

This is clearly not only a function of the refining and petrochemical margins, which have been extraordinarily high, but as well that we have been in a position to increase our sales volumes in terms of quality and volume, closely to compensating for the loss of the production of Bayernoil in the first half of 2014. At the right-hand side you see the investments into the division.

These are managed very carefully and, obviously, that converts into a very strong free cash flow generation. 40% of the CapEx over the last couple of years has been of the Group's free cash flow have been – operating cash flow has been coming from downstream and only 20% share in the CapEx.

That results in the same period of time of a free cash flow in the amount of some EUR3.8 billion. On the next page you can see the progress made in downstream oil during the past couple of years.

The net assets have been reduced by 28% since 2011. Clean cash costs per unit of refined product sales have come down by 13%.

And the new steering model that has been developed over some time has been transferred into a new organizational setup effective from July 1 of this year. This will ensure a reinforced market focus on the basis of an integrated margin management from crude supply to finished product sales.

On the right side of the graph I have included a ROACE comparison that had been recently published by Barclays. The dotted grey line shows the ROACE of majors average downstream oil, the solid grey line shows the ROACE of European downstream average oil and the green line shows downstream oil of OMV.

I believe that the OMV ROACE is somewhat overstated but the overall structure is correct and is a clear evidence of the substantial improvement in the profitability of OMV downstream oil since 2011, especially compared to our European peers. On the next page I would like to show you some KPIs showing the overall operational performance compared to our peers.

The main focus is directed to realize the maximum financial potential from the restructured asset base in downstream oil. This to go for the maximum economic utilization of our assets, clearly.

The middle graph shows the utilization rate of our refineries, which lies reliably over 90%, thereby clearly ahead of the competition. The current high refinery utilization of our peers is a function of the very high refining margins, clearly.

We, however, keep these high levels even in times of low margin, as you can see for the first half, especially of 2014, where the other refineries are potentially already in the red. A utilization rate of below 90% in our refineries only comes as a result of planned turnaround activities; so far not above low margins.

The right-hand graph shows the average throughput per retail station per country in our markets. And, again, you can see that we are far ahead of the industry in more or less all of them.

Again, this is demonstrating the superior utilization level of our assets; this time in the retail business. This resides, then, into the graph that shows on the very much left-hand side of the page, which is the clean CCS EBITDA over refinery throughput.

And I think this is showing a very clear message as well. Coming to Borealis, I've mentioned that we have had a record result on the clean CCS EBIT in the first half of 2015.

Borealis, as you know, is accounted for at equity and, therefore, shown in the financial result of the OMV Group. The increase, compared to last year for the first half, was from EUR88 million to EUR 176 million mainly driven by improved polyolefin and olefin margins, as well as a stronger contribution from Borouge, impacted possibly from higher volumes from Borouge as the ramp-up is actually in plan.

The polyolefin margins in Europe have been supported by a significant number of planned and unplanned outages. Some of them are still remaining.

On the next page we’re coming to downstream gas. Here you see on the graph the European gas markets remain over supplied.

As you can see, the demand is continuously going down over the years. That is mainly due to the low gas-to-power demand.

Renewables, and predominantly coal, are replacing the gas-based power production, thereby deteriorating the CO2 balance in Europe. Our power businesses in Romania and Turkey are suffering as well as the spark spread level most of the time is not allowing an economic power production.

This is the reason why we have impaired the power plants in Turkey by some EUR200 million, as already mentioned by David. The weak demand paired with the long-term off take agreements lead to oversupplied markets and very strong competition and finally reside in pretty much lower margin levels.

The demand in 2015 we would expect to be a bit higher, because 2014 was an extraordinarily warm winter. And so this should give us a certain support for the next winter at the end of the year.

And last I wanted to mention the logistics business, that is the transportation and the storage business, is coming in with a very reliable result at the same level of last year. On the next page is just the key actions going forward that I would like to focus here.

This is obviously improve the core business, to restructure the non-core assets and to further streamline the organization. We have already streamlined the organization to a certain extent; reducing the layers and more focusing on the markets by that, starting from July 1 onwards.

And the main focus in the second half now will be to decide the way forward in the current asset setup that we are having, which is too high, which we have to restructure, clearly. But I can already confirm that the asset restructuring in downstream gas will be a bigger challenge, even than in downstream oil, because the difficult market environment and the bleak outlook of this area of our business are very well known.

On the next page you see the downstream priorities for 2015 plus. That's just a wrap up.

Obviously, strong free cash flow from safe operations. One downstream organization and strong value chain integration, as under the headline of integration.

And performance, restructure the non-core gas and power assets and a strong focus on efficiency and operational performance. And, with that, I would like to hand over to the moderator to start the Q&A session.

Thank you.