The OMV Petrom Group reports a net profit of 1.84 billion lei after the first nine months of the year, a level more than twice the level recorded in the first three quarters of 2016. Investments fell slightly to 1.72 billion lei, compared to 1.81 billion lei, in the same period of the previous year (-5%), as sales increased by 20% to 14.29 billion lei.

„We benefitted from increased commodity prices and very strong refining margins. In addition, we continued our strict cost discipline to increase our competitive position and moved forward with investments”, said Mariana Gheorghe, CEO of OMV Petrom, in reference to the third trimester results. However these comments also apply for the entire 2017. ” Our 9m/17 Clean CCS Operating Result reached RON 2.7 bn, with both Upstream and Downstream showing significant increases . In Upstream, further reduced production costs overcompensated the impact of production decline. In Downstream Oil, the solid results reflected higher sales volumes, mostly in retail, and a continued high asset utilization”, also explained Mariana Gheorghe.

As for the prospects for 2017, OMV Petrom expects the average Brent oil price to be at USD 52/bbl., and the Brent-Urals spread is anticipated to decrease year on year. Growing private consumption in Romania is estimated to continue to support the demand for oil products, despite the expected decline in Q4/17 due to seasonality and increased excise duties for fuels. Refining margins are projected to be significantly higher than in 2016.

In Romania, OMV Petrom expects an increased demand for gas and fuels and a slight increase for power versus 2016.

The shareholders’ report also reminds of the regulatory updates, especially decisions by Parliament are pending with regards to the centralized market trading obligation and the supplementary taxation of revenues from gas price liberalization.

„We have recently seen progress with respect to government proposals regarding the royalty regime, for both onshore and offshore, as well as the operational framework for offshore activities”, Mariana Gheorghe also said. These issues are then detailed in the report:

• The government approved the draft Offshore Law, covering operational and taxation topics; the law is in the process of being adopted by the Parliament
• The government has published the draft law on royalties; the public consultation phase was recently completed
• A stable, predictable and investment-friendly fiscal and regulatory framework is a key requirement for our future investments, both onshore and offshore

„Through the nature of its business of extracting, processing, transporting and selling hydrocarbons, OMV Petrom is inherently exposed to safety and environmental risks. Through the company’s HSSE and risk management programs, OMV Petrom remains committed to be in line with industry standards”, the report writes. ” In terms of regulatory risk, the company is in dialogue with the Romanian authorities on topics of relevance for the industry. In the latest months, we have seen a number of fiscal and regulatory initiatives put in discussion. This increases legislative volatility with influence on the overall business environment.”