• The gas demand in Romania this year remains below the levels of 2015; stable demand on the electricity market

The gas demand in Romania will remain this year below the level of 2015, while competition will be increased, also because of the imported gas. On the electricity market, the demand will be relatively stable in 2016 compared to 2015, according to the market estimates conducted by OMV Petrom, at the presentation of the financial results for the first 9 months.

“We estimate that in 2016, gas demand in Romania will remain below the level of 2015, while the competition will be increased, also because of the imported gas. The additional pressure on the prices and margins is generated by the recent amendments to the Energy Law, including a requirement for the manufacturers and suppliers of natural gas to sell / buy via the centralized platforms by 2021. On the electricity market, we expect that demand will be relatively stable in 2016 compared to 2015 with improved margins”, it is shown in OMV Petrom report, according to Agerpres.

For 2016, OMV Petrom estimates that the price of Brent crude oil will record an average of 44 dollars / barrel and the Brent-Urals differential is anticipated to be higher than in recent years.

According to the mentioned source, the value of investments (including the capitalized exploration and evaluation works) for 2016 is estimated at about 600 million euro, about 30% lower than 2015, out of which approximately 85% will be devoted to projects in Upstream.

“The investments for exploration are estimated to decrease by around 70% compared to the high level of 2015, mainly due to the completion of the drilling activities in the Neptun Block. Continuous focus on strict cost management and portfolio optimization will generate an extended and solid cash flow,” said the group.

For the exploration, development and production works of oil and natural gas (Upstream), OMV Petrom estimates that the decrease of the annual average production at Group level will be of 4% compared to 2015, due to the natural decline not fully compensated by the investment and the planned works to optimize surface facilities at Totea Deep in October 2016. In the manufacturing and development sector – about 1.000 capital repair works and drilling of 40 new wells in 2016 are estimated. In exploration – drilling works are planned to begin in Q4 / 16 with two wells, one offshore in the shallow water and one onshore, and the Neptun Deep block is underway on a detailed analysis to determine the viability of a commercial development.

In refining (Downstream), the group expects the refinery utilization rate to remain at around 90% in 2016. “We will continue to focus on improving the operational performance and energy efficiency. Despite the challenges ahead, we will focus on maintaining the position in the gas market by improving and optimizing the portfolio through stronger orientation towards the customers”, says the document.

The group also announced that due to a malfunction in a transformer, one of the gas turbines of the Brazi power plant will be unavailable for the rest of the year, which will affect the 2016 results; the exact analysis impact is still ongoing. Also, the sale of the wind farm in Dorobanţu is ongoing.

The Austrian Group OMV is Petrom’s majority shareholder, with a stake of 51.01%. The Ministry of Energy holds 20.64% of the Petrom shares, Fondul Proprietatea – 18.99% and 9.3572% other shareholders. Petrom is the largest Romanian oil and gas group, with activities in the Upstream (Exploration and Production), Downstream Oil (Refining and Marketing), Downstream Gas (Gas and Power) sectors.