1. MOL GROUP PETROCHEMICALS
MOL PETROCHEMICALS & SLOVNAFT
THE LARGEST PLASTIC RAW MATERIAL PRODUCER IN CENTRAL EUROPE
Open Doors Customer Meeting
Egerszalók,
Peter Haltenberger
Group Petrochemicals Business Unit Director

2. MOL GROUP… Core activities
Is AN INTEGRATED, INTERNATIONAL OIL AND GAS COMPANY
Is HEADQUARTERED IN BUDAPEST, HUNGARY
Has a TRACK RECORD OF OVER 100 YEARS IN THE INDUSTRY
Has LEAD POSITIONS IN OUR HOME MARKETS WITHIN CENTRAL EASTERN EUROPE
Core activities
CcS EBITDA CONTRIBUTION OF THE MAIN SEGMENTS IN 2016 (USD MN)
ALL FINANCIAL DATA FROM 2016
UPSTREAM
DOWNSTREAM
GAS MIDSTREAM
675
1453
194

3. Key financial figures (2016)
CCS EBITDA
CAPEX
CAPITALISATION
NET REVENUE
USD 2.15 BN
USD 1.1 BN
USD 7.3 BN
USD 12.6 BN
Operating Cash flow (USD BN)
2011
1.857
2012
2.014
2013
2.748
2014
1.863
2015
2.088
2016
1.843

4. 8 8 UPSTREAM 75 years of experience in exploration and production
Oil and gas exploration and production assets in 13 countries
Core areas: CEE, Middle East & Pakistan, North Sea, Russia
MOL 2030 strategy targets self funding and value generating business in a low oil price environment
Committed to ensure safe, responsible and sustainable operations
EXPLORATION
PRODUCTION 8 8

5. 6 DOWNSTREAM 4 refineries and 2 petrochemical plants
Transforms crude oil into a range of refined products for domestic, industrial and transport use
The products include, among others, gasoline, diesel, heating oil, aviation fuel, lubricants, bitumen, sulphur and liquefied petroleum gas
Produce and sell petrochemicals worldwide and hold a leading position in the petrochemical sector in the Central Eastern Europe region
PRODUCTION UNITS 6

6. CONSUMER SERVICES
Own network of around 2,000 service stations under 7 brands across 10 countries in Central & South Eastern Europe
SERVICE STATIONS
~2000
1 0
COUNTRIES

7. PETROCHEMICAL VALUE CHAIN
Raw materials processed in 2016: 2,200 ktons
Polymer sales in 2016: ktons
Naphta, LPG, Gasoil, Propylene
Ethylene, Butadiene sales
Polyolefins
Steam crackers
Polymer units
LDPE
HDPE PP
Plastic Producers
MOL GROUP Downstream,
Refining
pygas, H2,
i-butene
Olefins
Petrochemical plants
Refinery
Current annual feedstock transfer of 2.2 Mt from Refining to Petrochemicals…
… and 530 kt from Petrochemicals to Refining
The crude supply of MOL Refineries is ensured by pipelines from Russia and from Adriatic see as alternative.
LPG: Liquefied Petroleum Gas

8. MOL Petrochemicals, Tiszaújváros site Slovnaft, Bratislava site
PRODUCTion
MOL Petrochemicals, Tiszaújváros site
Slovnaft, Bratislava site
Steam Cracker 2
290 ktpa Linde 2004
Steam Cracker
220 ktpa ABB Lummus 1975
Steam Cracker 1
370 ktpa Linde 1975
LDPE 2
65 ktpa BASF 1991
BDE
130 ktpa 2015
HDPE 2
220 ktpa Mitsui 2004
HDPE 1
200 ktpa Philips 1986
PP 4
180 ktpa Himont 1999
PP 3
100 ktpa Himont 1989
POLYETHYLENE (LD/HD)
40 ktpa ICI 1976
LDPE 3
90 ktpa CDF 1977
PP-3
255 ktpa Dow 2005
POLYPROPYLENE
OLEFINS
R E F I N E R I E S
Ethylene sales
ethylene
propylene
naphtha
gasoil
LPG
by-products
LDPE 4
220 ktpa Basell 2016
Crude C4
Butadiene sales

9. THE BIGGEST PLASTIC RAW MATERIAL PRODUCERS IN CE
LDPE capacities in Europe
HDPE capacities in Europe
PP capacities in Europe
Source: Nexant
Butadiene capacities in Europe
MOL Group Polymers is in TOP 10 European polymer producers and the biggest producer in Central Europe.
Our competitive advantages
Efficient assets
Up-to-date product portfolio
Integrated and optimized feedstock supply
Strong regional position
Proximity to rapid growth regions of Eastern Europe
2015 Capacity data

10. 4.5 % Market share in Europe
european player in polymer business
19 % Market share in CE
10 % Market share in CEE
4.5 % Market share in Europe
Sales office
We sold 999 kilotons polymer in 2016
to 45 countries (from Mexico to China)
to ~ 1600 customers
in 8 segments (from Automotive to Packaging)
via sales offices operating in seven countries – in Germany, Poland, Italy, Austria, Romania, Croatia and Ukraine - as MOL subsidiaries.
Frissíteni szükséges 2016-os keresleti adatokkal
CEE: Central and eastern Europe
CE: Central Europe

11. Petchem industry OUTLOOK
Forecasting strong, 3%-5% global growth potential
Other than ethylene derivatives are attractive for European naphtha based producers
The global petchem industry continues to experience major disruptions. On the demand side a shift to faster growing Asian markets; on the supply side shale gas developments in the US and coal in China have altered the feedstock mix for petchem producers. These trends are challenging the business models for the key buliding blocks in the industry:
E and its derivatives will be continued to be oversupplied from US based on cheap shale gas. EU crackers –which still rely on more expensive naphtha as feedstock must streamline their operations to improve efficiency and develop new higher value derivatives.
P market will continue to experience supply constraints on short term and in response US companies should consider integrating upstream into new on-purpose routes. European producers need to rely on tight integration with refineries and product and feedstock innovation to remain competitive.
BD value chain has been among the most significantly affected by the supply/demand movements, resulting in extreme price volatility. The primary reason is that the butadiene market is far smaller and minor changes in supply or demand can significantly alter the overall balance.
In the coming years the most significant factor affecting the market is the growing tire industry in Asia, whose automotive market is booming driven by growth of middle class population.
Aromatics: continue to be in short supply (due to closure of refineries and decreasing share of naphtha crackers), challenging refiners to increase yield/production and users of aromatics investing in stand-alone reformate units to secure supply.

12. Future of current assets
olefins
Steam cracker efficiency and reliability programme
HDPE
HDPE-1 lifetime extension project
old unit, running from 1986
future after 2020: investment options under investigation
unimodal or bimodal operation mode possibilities
LDPE
Mpc ldpe-2 product portfolio upgrade
focus on more value-added grades after start-up SN LD4 unit
Ktpa: kilotonnes per annual
CAPEX: capital expenditure PP
SN PP capacity intensification project
increase up to ~ ktpa

13. 130 ktpa 220 ktpa 60 ktpa Extending the Petrochemicals Value Chain
LDPE4
130 ktpa
USD ~150mn
Butadiene
USD ~350mn
220 ktpa
Synthetic rubber
Ktpa: kilotonnes per annual
CAPEX: capital expenditure
60 ktpa

14. FORWARD INTEGRATION OPTIONS ALONG THE PROPYLENE VALUE CHAIN
Polyols – an attractive propylene derivative
FORWARD INTEGRATION OPTIONS ALONG THE PROPYLENE VALUE CHAIN
STRATEGIC OBJECTIVES
Others
II. Polyol
I. Polypropylene
Further analyses is in progress to recognize other attractive specialties
Global market size: 26 mt/y
Covers various segments
Other Propylene Derivatives
Semi-Commodity
Polymer
Global market size: 7 mt/y
Investment into propylene oxide based polyols is targeted
LTE: lifetime extension
The biggest propylene derivative is PP which is a commodity polymer used in wide range of application segments from automotive to packaging, also representing ~ 50 % of MOL polymer sales. The economic unit size of a new PP plant is 300kt/year therefore moving towards PP and capturing market growth potential would require on-purpose propylene production since the amount of propylene available from own assets is insufficient to reach that level. The only lucrative option to produce significant amount of propylene is through propane conversion. In this case we would be exposed to external propane purchases limiting our ability to leverage feedstock integration. Furthermore a landlocked producer would have significant cost disadvantage against coastal units mainly due to transportation cost.
Our primary diversification target shall be the polyol business. Polyol is the second biggest & dynamically growing derivative of propylene. It is a semi-commodity polymer priced as engineering plastics with main applications in automotive, packaging, construction, furniture and bedding. It is a dynamically growing and high-margin business where we could use both our regional competitive advantages as well as our own feedstock basis. This chain offers attractive investment options for MOL Group, with significantly more opportunities for specialties than the polyolefins currently produced by MOL.
One step further other propylene derivatives offer a wide range of further opportunities with specialty and semi-specialty products besides the above mentioned two options. In order to explore other attractive directions MOL Group keeps on further investigating its options. This could mean further investments already in the next 5 years but it may be too early to define this at this stage.
Forward integration into higher value added products, debottlenecking and LTE of existing units is planned
Global market size : 58 mt/y
Commodity
Polymer

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