The significant operational achievements and strong financial performance of the HELLENIC PETROLEUM Group in 2018 – for the 4th year in a row – the new record in production, sales and exports, the stabilization of profitability at historically higher levels, the increased cash flow, the strengthening of the balance sheet, the further reduction of financial costs, the significant increase in the capitalization of the Company, as well as the higher dividend over time, along with strategic partnerships with the top international companies ExxonMobil, Total, Repsol and Edison for the exploration and production of hydrocarbons in Western Greece consolidate the image of the successful course of the Group internationally and facilitate its entry into a new era of productive reconstruction and sustainable development in the context of energy and digital transformation, and the increased demands in know-how and technology required by the 4th Industrial Revolution.
In order to maintain this profitable, outward-looking and competitive course of ΗELPE in the upcoming period, it is imperative that there be a systematic redefinition of the Group’s strategy and objectives. This is the only way to deal with unpredictable external factors, such as the uncertain and volatile environment globally, the variations in crude products due to geopolitical turbulence, the declining trend of the international refining margins, which has a negative impact on the estimated results, as well as the significant increase in CO2 credits’ price that further increases the major competitiveness deficit of European refineries.
At the same time, ΗELPE Group is called upon to respond to the challenges of global and national issues, such as moving to a low-carbon economy, meeting the ever-increasing energy needs, and coping with climate change, natural resource scarcity and loss of biodiversity. Climate action is one of the most important challenges in this century and should be undertaken smoothly and with the lowest possible social cost. For energy companies, greenhouse gas emission reduction targets and increased carbon emissions costs require adaptation to the new energy-driven transformation needs. Changes that occur globally with the 4th Industrial Revolution create many challenges that are different from the ones that the world has experienced to date and reshape the entire system of production, trade and governance of societies, signalling new opportunities at the same time.
The twin challenge of sustainable development and global transformations brought about by new technologies in every aspect of human activity requires strengthening the links between industry and universities to co-generate knowledge and innovation. The Triangle of Knowledge and the interactions between education, research and innovation constitute the new roadmap for economic growth in a rapidly changing environment, as well as the cornerstone of the strategy of the HELPE Group for its transition to the new era.
The way in which the Group plans energy transformation, how its facilities adapt to the low-carbon economy, and the change in energy mix coupled with the accelerating digital transformation are factors that contribute to the long-term business success of the company, such as climate change risk management, product development, customer relations, corporate governance, business ethics and transparency.
The HELLENIC PETROLEUM Group, responding to the contemporary global challenges and taking into account the needs of society and other stakeholders, has completed the new sustainable development roadmap and is already implementing the Five-Year Development Plan for the years 2019-2023 that is part of the Group’s transition program into the new production model of the post-digital era.
The main medium-term objectives of the Five-Year Plan emphasize growth in the Renewable Energy Sources sector and the strengthening of the Group’s position in Natural Gas and Hydrocarbon Research & Production with absolute respect to the environment and the local communities.
The HELPE Group understands and shares the urgency of global expectations for the transition to a neutral-carbon-footprint society, following the 2015 Paris Agreement and the recent (October 2018) reference by the report of the Intergovernmental Panel on Climate Change (IPCC) to the need for immediate action to limit the rise in temperature to 1.5°C, and supports the 17 UN Sustainable Development Goals. This global development plan emphasizes the fact that economic growth needs to be accompanied by social justice and environmental sustainability.
As part of its active participation in this new production model, HELLENIC PETROLEUM has already begun implementing programs and actions to transform and increase operational efficiency, while respecting humans and the environment. As a result, in 2018 the improvement of the key performance indicators linked to the three pillars of Sustainable Development – Economy, Environment and Society – continued.
The stabilization of the Group’s profitability at historical highs with comparable EBITDA profits of €730 million, as well as significant value generation from all of the Group’s business activities (i.e. its social product), contributes substantially to wider economic growth and the strengthening of the so-called “Social License to Operate”. At the same time, it enables the implementation of a targeted program of Corporate Social Responsibility actions, through which a total of €6.68 million was allocated last year to support the new generation, the education community and vulnerable groups, with emphasis on the areas affected by the fires and floods, but also in actions oriented towards culture, the dissemination of our cultural heritage, sports, health, and infrastructure projects.
At the core of the Group’s energy transformation process lies the upgrading of energy and fuel production infrastructure to increase energy efficiency and reduce CO2 emissions, the investments in Renewable Energy Sources and second-generation biofuels, the gradual substitution of crude oil by low-carbon raw materials, and research & development in low carbon footprint technologies and applications. In this direction, the Group develops collaborations and supports research projects with the academic and research community, aiming at providing innovative solutions for the production of low carbon energy products. At the same time, it supports extensive waste reduction, recycling and re-use programs in refineries, trading and all subsidiaries.
The improvement of the environmental performance of the Group continued in 2018, with the most significant indices of GHG emissions (per ton of feed) having been reduced by at least 30% over the past 5 years, while continuing efforts to extend the use of natural resources and / or waste from the productive process in the context of the circular economy. For example, last year, the rate of recycling and re-use of water was significantly improved compared to 2017, while plant waste was utilized by at least 75%, aiming to increase this rate to more than 85% in the future.
Through the investments made to achieve optimal energy efficiency and energy optimization, a carbon footprint reduction was achieved, with the refineries’ carbon intensity index (CO2 / tn per raw material unit) having decreased by 19% over the last four years (reference year 2014), compared with the original 5% reduction target by 2020. At the same time, in 2018, RES contributed to the reduction of the carbon footprint by 115,000 tonnes of CO2, with a target to reach 500,000 tonnes of CO2 by 2025 through the development of a portfolio of Renewable Energy Sources with an installed capacity of about 300MW.
Effective climate change management by the Group was acknowledged in 2018 by the reputable international organisation CDP, which rated it as B-, above the average (C) of the Oil and Gas industry worldwide.
In the field of Health and Safety, there is ongoing investment in the prevention, infrastructure and training of staff and associates to ensure compliance with the strictest criteria at the national and European level. In 2018, approximately €22 million was invested in safety improvements in the facilities, initiatives were implemented to build a safety culture, and the quality of staff training was enhanced. With our steady commitment to the Holistic Safety program, there has been a substantial improvement in the safety indices – the best in recent years; indicatively, the overall All Injury Frequency (AIF, HELPE & Domestic Trade) and Lost Workdays Injury Frequency (LWIF, HELPE & Domestic Trade) indices decreased by 56% and 59% compared to 2017, respectively.
The HELPE Group, with continuous investments, systematic and analytical planning, clear objectives and effective actions within the framework of the five-year rolling Sustainable Development and Transformation Programs, successfully implements the transition to the new productive model of the post-digital era, focusing on energy and digital transformation.
In the context of the “European vision for a climate-neutral Europe by 2050” of the European strategy for industry, energy transition and digital transformation, as well as the national energy and climate framework for sustainable development (Agenda 2030) and the transformation of productive structures (“A Growth Strategy for the Future”), the Group shaped the HELPE Vision for Sustainable Development towards a low-carbon economy, with the main aim of remaining a pioneering Energy Group in Southeast Europe.
Our commitment to operating in an economically, socially and environmentally responsible manner is reflected in the linkage of each of our strategic choices to the 17 UN Sustainable Development Goals and in our continued participation in the Global Compact, contributing to the collective effort to achieve them.
Today, after completing the most successful five-year period (2014-2018) in the history of HELPE, the Group – more powerful than ever – implements the vision for Sustainable Development, having an integrated strategic plan that will enable it to maintain the leading position that it occupies in Southeast Europe, while contributing to the recovery of the national economy and support for local societies. The management, executives and employees of HELLENIC PETROLEUM are the guarantors of a positive outcome.
Chairman of BoD & CEO