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OMV Petrom’s 2Q Net Rises 65% as Production Stabilizes

Aug. 13 (Bloomberg) -- OMV Petrom SA, Romania’s biggest oil company, said its second-quarter profit rose 65 percent because of stable production and improved refinery operating income.

Net income advanced to 1.06 billion lei ($318 million) from 643 million lei a year earlier, the Bucharest-based company said in a regulatory statement today. Sales shrank 7 percent to 5.8 billion lei because of lower crude sales volumes and lower product prices, it said.

“We have further pursued our significant investment program, which has enabled us to successfully stabilize production,” Chief Executive Officer Mariana Gheorghe said in the statement. “We are striving to deliver our ambitious 2013 investment program of more than 1.2 billion euros, while addressing the challenges in the gas and electricity markets, and relying on an investment-friendly regulatory and fiscal framework.”

Petrom is trying to reverse a 10 percent natural decline of its mature oil and gas production in Romania by redeveloping domestic fields and searching for new offshore resources in the Black Sea with Exxon Mobil Corp, Gheorghe said today. Spending on exploration totaled 70 million lei in the second quarter due to the acquisition of seismic data for the Neptun block in the Black Sea, the company said.

Income Rises

Petrom’s total oil and gas production grew 1 percent in the second quarter to 184,000 barrels of oil equivalent a day from a year earlier because of higher gas output in Romania, it said. The crude price environment “remained supportive,” according to the statement.

Earnings before interest and taxes rose to 1.4 billion lei in the second quarter, a 53 percent increase from a year earlier, Petrom said. Its first-half net income rose 18 percent to 2.4 billion lei.

“The improved earnings are due to the base effect, because the Petrobrazi refinery was shut down for six weeks in the second quarter of last year,” Gheorghe said.

Petrom will consider investing in the shale-gas industry toward 2021, when its current strategy of focusing on conventional and deep-water resources ends, Gheorghe said.

The company’s shares rose 0.7 percent to 0.442 lei per share by 2:18 p.m. local time, valuing Petrom at 25 billion lei.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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