Romania: OMV Petrom lower profit in Q1 2020

, SEE Energy News

The coronavirus outbreak and the efforts to contain it affect the global economy and, as a result, have a negative impact on prices and demand for oil products, gas, electricity and crude oil. Demand for oil products, gas and electricity is expected to be significantly lower this year, compared to 2019. Romanian largest oil and gas company OMV Petrom, a part of Austrian OMV Group, recorded a net profit in the amount of 135 million euros in the first three months of 2020, which is 43 % lower compared to the same period last year.

However, its sales rose by 12 % year-on-year to 1.25 billion euros in the January-March period. Sales improved due to higher natural gas volumes sold, which partially compensated for lower commodity prices and lower volumes of electricity sold. Downstream Oil represented 63 % of total consolidated sales, while Downstream Gas accounted for 35 % and Upstream for 1 %.

Capital expenditures rose by 16 % on the year to 198 million euros in the reviewed period, consisting mainly of Upstream investments. For 2020, OMV Petrom now plans capital expenditures of 620 million euros, compared to an earlier target of 870 million. The reduction would mainly come from drilling activity prioritization, as well as postponement of petrochemical and retail projects.

In the Upstream segment, OMV Petrom posted a 32.5 million euros clean operating result, down by 80 % on the year, mainly due to lower oil and gas prices and higher depreciation. Exploration expenditures fell by 22 % year-on-year in the first quarter, to 14.9 million euros, due to lower exploration drilling and testing activity. Total hydrocarbon production decreased by 0.8 % to 13.2 million barrels of oil equivalent in the first quarter.

In the downstream segment, the group’s operating result rose 75 % 136.5 million euros, reflecting significantly higher Downstream Oil result and marginally lower Downstream Gas result.

Total sales of refined products edged down by 1 % on the year, reflecting the favorable market conditions from the first two months of the year, the effect of COVID-19 outbreak being visible only towards the end of March. Gas sales volumes increased by an annual 52 % to 18.61 TWh.