Oil & Gas

OMV Petrom’s Profit up 53% in H1

OMV Petrom has published, on the last day of July, the financial and operational results for the second quarter of this year. The value of consolidated sales increased in the second quarter of this year by 19% compared to Q2/18, to RON 11.32bn, supported by higher volumes and prices of petroleum products and higher gas prices, which offset the lower volumes of gas and electricity sales. The Clean CCS Operating Result increased by 31%, to RON 2.22 billion, due to an increase in sales, while the net profit stood at RON 1.98 billion, by 53% higher than in the similar period of last year. Company’s investments totalled RON 1.7 billion and contribution to Romania’s state budget, during January – June 2019, was RON 6 billion.

Referring to investment projects during January – June 2019, in Upstream, an investment project of approximately EUR 50 million was completed, for an additional gas treatment station in Hurezani – the most important gas treatment unit in the country. The initiative was part of a multi-year investment program of EUR 200 million that targeted the development in Hurezani of a gas hub serving gas production in south-eastern Romania. The company has also started a new drilling campaign in the shallow waters of the Black Sea.

In Downstream Oil, three important projects have been completed, with investments of around EUR 130 million in the recent years: the Polyfuel unit, modernization of the Coker unit at Petrobrazi and upgrade of the fuel terminal in Arad. OMV Petrom has also received Competition Council’s approval and continues negotiations with Auchan to extend the partnership in stores within Petrom stations.

With a Clean Operating Result of RON 1.60 billion, by 9% higher y/y, the Upstream segment had a contribution of over two thirds in the Clean Operating Result of OMV Petrom. Romania’s daily production fell by 5%, mainly due to natural decline, in conditions of decrease by 8% in gas production, the production cost being USD 11.4/boe, down 3%, mainly due to a favourable evolution of the exchange rate.

In Downstream Oil, the OMV Petrom indicator refining margin decreased by 44%, to USD 3.74/bbl, being influenced by the evolution of international prices for crude oil and petroleum products, and the volume of retail sales of the Group increased by 4%, due to a higher demand in Romania and in the region.

In Downstream Gas, gas sales to third parties fell by 13% due to a decrease in own gas production and increase in volumes injected in the underground storage facilities, while net electricity production fell by 14%, to 1.13 TWh, due to planned closure of Brazi power plant and market conditions (negative margins).

What’s interesting is that Group hydrocarbon production decreased by 5.6%, due to lower production both in Romania and Kazakhstan.

For the future, the company estimates a demand for petroleum products above the level recorded in 2018, the gas and electricity demand being expected at a relatively similar level as in 2018. In terms of investments, it was planned to drill around 100 new wells and side-tracks and maintain a constant level of workovers yoy. Investment in exploration is estimated at RON 0.4 billion and Brazi power plant is estimated to have a total electricity production lower than in 2018.

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