OMV Petrom will reduce its investment with percentages between 20% and 35% this year, mainly due to the sharp fall in oil prices in the international market, said this company’s management. The company estimates that a barrel of crude oil will not exceed 60 dollars in 2015.

The current program of investment is estimated to be worth between 800 million and 1.1 billion euros, with 85% of the amount heading for exploration and production. OMV Petrom investments last year totaled 6.23 billion lei (1.4 billion euro).

A 56% decrease in profit

OMV Petrom’s net profit declined last year to less than half than the one recorded in 2013, reaching 2.1 billion lei (473 million euros), the company incurred losses of 307 million lei in the last quarter, the first negative result since the third quarter of 2010. OMV Petrom sales dropped last year to 21.5 billion lei (4.84 billion euros), from 24.1 billion lei in 2013.

“In 2014 we continued our efforts to stabilize production, recording the second consecutive year of marginal increase in hydrocarbon production in Romania compared to the previous year. In exploration we made the largest investment since privatization both in onshore and offshore and recorded a rate of 60% success in classic exploration activity (excluding the offshore deep). We resumed drilling in the Neptun block, digging two new wells, Domino-2 and Pelican South-1.

In 2015 exploration program will continue as planned. In Gas and Power, difficulties persisted because of falling demand in the gas market and negative margins that led to a deteriorating result of Brazi power plant. In Refining and Marketing we successfully completed the modernization of Petrobrazi, which led to the planned increase of 5 dollars/ bbl refining margin indicator, contributing to the good annual result and to strengthen the value company of integration”, said Petrom CEO, Mariana Gheorghe.

Petrom profit, 52% of OMV profit

OMV Petrom generated last year a profit of 1.16 billion euros, or 52% of OMV profit, compared to 50% in 2013. OMV profit before interest and taxes, adjusted for non-recurring items and inventory effects in refining, fell last year by 15%, from 2.64 billion euros from 2.23 billion euros. Overall, the Austrian group earnings were affected by lower oil prices and the problems in Libya and Yemen, noted Mediafax.

“We achieved solid results in 2014, despite a tumultuous year for the industry, with lower oil prices by about 50% in the second half of the year and the unstable situation in Libya and Yemen. We managed to increase production by 8% in 2014, mainly attributable to assets held in Norway”, said Gerhard Roiss, CEO of OMV.

OMV earnings before taxes and interest decreased by 59% in 2014, to 1.05 billion euros. Petrom contributed 740 million euros, down 45% compared to 2013. OMV net income adjusted, attributable to shareholders, increased by 2% last year, to 1.13 billion euros. OMV sales fell by 15% last year, from 42.4 billion euros to 35.9 billion euros.

Production will fall by 2% – 4% this year

OMV Petrom had, at the end of last year, proved oil and gas reserves of 690 million barrels of oil equivalent (boe), of which 671 million boe in Romania. Proved and probable reserves of oil and gas stood at 977 million boe, of which 930 million boe in Romania.

The company estimates that its 2015 oil production will fall by up to 4%, a position that requires the review of the investment portfolio. “Cost efficiency will be higher. We eliminate waste and streamline processes. We reviewed all investment portfolio”, said Mariana Gheorghe. Last year, 35 small reservoirs were on sale.

Last year’s oil and gas production was 65.82 million boe, 1% lower than in 2013 due to lower production in Kazakhstan. In Romania, the total production of oil, gas and condensate production was 62.57 million boe. The wells drilled in the past four years provided 25% of oil production, 11% of production is ensured by well work overs and the installation of new wells and 8% is generated by redevelopment of deposits, recorded Mediafax.