OMV Petrom 3rd-Quarter Net Falls 20% on Oil Price MovesAndra Timu
OMV Petrom SA, Romania’s largest oil company, said its net income declined 20 percent from a year earlier because of lower oil prices and output.
Profit dropped to 1.02 billion lei ($288 million) from 1.27 billion lei in the same period last year as both the gas and power business had a negative contribution “triggered by adverse market conditions,” the company said in a statement to the Bucharest bourse today. Gas sales fell 23 percent to 798 million lei.
“In light of the volatile and weaker market fundamentals we are reviewing our investment plans fro 2015, which will be announced on Feb. 19,” Petrom Chief Executive Officer Mariana Gheorghe said in the statement. “A stable and predictable investment-friendly fiscal and regulatory environment remains a key prerequisite for our investment program.”
Petrom, together with Exxon Mobil Corp. are searching for oil and gas off Romania’s Black Sea coast after starting drilling operations in the Neptun block in 2011. OMV AG, Petrom’s majority owner, made a preliminary estimate for the Domino-1 well in 2012 of gas accumulation ranging from 1.5 trillion to 3 trillion cubic feet (42 billion cubic meters to 84 billion cubic meters).
Results from the drilling of Domino 2 well will be announced at the beginning of next year, the company said.
Discoveries in the Black Sea may help Romania, which imports less than 20 percent of its natural gas from Russia, become energy independent by 2020, according to Energy Minister Razvan Nicolescu.
Romania plans to increase royalties for oil and gas produced from next year from the current range of 3 percent to 13.5 percent. That should bring the fees closer to levels in other European Union countries as the country seeks to boost budget revenue and fund investments. The taxes will differ for onshore and offshore fields, Prime Minister Victor Ponta said on June 4.
“The gas and power regulatory framework is undergoing significant changes, with a strong impact on the company’s financial and operating results,” Petrom said in the statement. Marketing volumes will be “challenged” by higher competition and fuels taxation, the company said.
Petrom plans to boost efforts to stabilize Romanian production by performing more than 1,400 workovers, delivering about 140 new wells, with half of them being part of “complex field redevelopment projects and exploration wells,” according to the statement.