OMV Gas Move & more. Financing the Nabucco Gas Pipeline Project Brussels, November 9th, 2006 Reinhard Mitschek OMV Gas International GmbH Head of International Pipeline Projects Nabucco Gas Pipeline International Managing Director

2 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project New gas transmission possiblity  Pipeline Diameter: 56“  Distance: 3,300 km  Investment: 4.6 bill. €  Transport capacity: max. cap. 31 bcmy

3 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Bankability issues  Shareholder Profile  Long Term Transportation Contracts  Competitive Pipeline Tariff Level  Harmonized legal framework in the region of SEE  Intergovernmental Agreement  Stable, long term foreseeable regulatory framework  Energy Community Treaty  Foreseeable economics and predictable project business plan  Exemption High cash flow with a maximum repayment period of 10 years with minimum risk

4 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Project financing structure Average Debt Service Cover Ratio of 1,5 Secured by Pre-Completion Guarantee fee- 70 % Investment- grade credits 30 % Others MLAs:1500 (EIB, EBRD, IFC) direct (A Loan)1000 indirect 500 (B loan: from commercial banks with MLA guarantee) ECAs:1000 (JBIC, KfW etc.) OeKB 500 Commerical banks 500 Debt : Equity 70 : 30 Equity ca. 30 % ≥ 1,5 bn EUR Shareholder Loans tbd. expected: 0 Investment 5 bn EUR Debt ca 70 % ≤ 3,5 bn EUR

5 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial requirements  Up-front investment is most feasible model  Debt:Equity = 60:40 to 70:30  Tenor maximum period 15 y  Total bank financing necessity 3.5 bill. €  Total investment needs: 4.6 bill. € (value 2004)  Improved credit mix of sponsor group necessary

6 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial Requirements Request for (very) long term depreciation of investment in tariff model from Regulatory Authorities versus Request for mid term pay back periods from Financial Institutions

7 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial Requirements Request for tariff methodology based on low return from Regulatory Authorities versus Request for a average debt service cover ratio of 1.5 (minDSCR 1.3) needs high cash in

8 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial Requirements Development and construction of such an infrastructure project needs 8 to 10 years Request for short term contracts for a considerable part of the transport capacity from Regulatory Authorities versus Alternative for risk mitigation by long term contracts

9 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Gas Infrastructure Projects: Risk Allocation – a balancing exercise Source: Norton Rose, Presentation at Fourth Asia Gas Partnership Summit on February 20th, 2006 Construction risk Operational risk Force majeure risk Exchange rate risk Cash flow risk Default risk Market risk Technology risk Political risk Environmental risk Counterparty credit risk

10 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial Requirements Need for an exemption from certain regulations Request for interventions in relation to tariffs and tariff methodology from Regulatory Authorities versus Request for a stable predictable business plan from sponsors and financial institutions

11 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Nabucco Gas Pipeline Project Financial Requirements  Legal / Contractual framework - Within the EU  European Law - Within the Energy community  EC-Treaty - Outside the EU  Intergovernmental / Host Governmental Agreements  No basis for the time being for a multi cross border infrastructur project Turkey – Bulgaria – Romania – Hungary - Austria !!!

12 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Concluding remarks  Large Scale projects are in feasibility and/or development phases. The development and construction period of such projects is 6 to 8 years  Involved risk/risk reduction is highly important for the shareholders and for the creditability of the project. Taken risks have to be rewarded.  Risk mitigation and clear commitment is a joint responsibility of companies as well as governments and the European Union.  A stable and predictable legal and regulatory framework is crucial in order to provide a sound investment climate

13 |OMV Gas International GmbH, Reinhard Mitschek, November 2006 Contact Nabucco Gas Pipeline International GmbH floridotower Floridsdorfer Haupstraße 1; 1210 Vienna Austria Reinhard Mitschek Tel Fax:

14 |OMV Gas International GmbH, Reinhard Mitschek, November 2006