Bogdan Tudorache

OMV Petrom’s revenues registered last year advanced by 13%, to about 25.5 billion lei, but the company announced a decrease of the net profit by 11%, to 3.63 billion lei, compared to 2018. The investments amounted to 4.2 billion lei, down 2% from the previous year.

At the same time, OMV’s management proposes a gross dividend of 0.031 lei/ share for the financial year 2019, up by 15%.

The value of consolidated sales increased in 2019 by 13% compared to 2018, up to 25.48 billion lei, mainly due to higher sales volumes of natural gas and petroleum products. Operating profit based on current costs (CCA) excluding special items decreased by 5%, to 4.57 billion lei, reflecting the unfavorable environment for oil and refining margin quotas. At the same time, the contribution to the state budget of Romania between January and December 2019 was of 11.9 billion lei. For 2020, OMV Petrom expects the average price of Brent crude oil to be USD 60/ bbl (2019: USD 64/ bbl). The refining margins are estimated to be over USD 5/ bbl.

Here are some items on the company’s balance sheet:

Upstream

• With an operating result excluding special items of 2.84 billion lei, 12% lower than in 2018, the Upstream segment had a contribution of approximately two thirds of the operating result excluding the special elements of OMV Petrom
• The Group’s production decreased by 5% compared to 2018, mainly due to the decline of natural gas production in Romania by 7%, as the contribution from the discoveries (4461 Totea Sud) only partially offset the abrupt natural decline
• The cost of production of the Group was USD 10.90/ boe, decreasing by 3% mainly due to the favorable evolution of the exchange rate.

Downstream Oil

• The operating result of CCA excluding the special elements was of 1.5 billion lei, 12% higher. The result reflects the low base effect due to the planned refining of the previous year, a robust operational performance in 2019, with the refinery utilization rate of 97%, as well as the increased sales contribution.
• The refining margin indicator OMV Petrom decreased by 26%, to 4.67 USD/ bbl, being influenced by the evolution of international prices of petroleum products and crude oil.
• In a very competitive market, the total sales volume of refined products increased by 10% compared to 2018, reflecting the increase in demand and the low base from 2018, caused by the planned shutdown of the Petrobrazi refinery.
• The Group’s retail sales increased by 4%.

Downstream Gas

• The operating result excluding the special elements was of 282 million lei, reflecting the optimization of the portfolio of customers and products.
• The volume of sales of natural gas to third parties increased by 16%, by intensifying the trading activity and increasing the number of B2B customers.
• The net electricity production was of 3.40 TWh, representing 6% of Romania’s electricity production

Key investment projects 2019

Upstream

• The largest gas treatment plant in the country was completed in Hurezani, with investments of about 50 million euro. The initiative was part of an investment program of 200 million euro over several years, to develop in the Hurezani gas hub to serve gas production in South-East Romania.
• Drilling campaign in the shallow waters of the Black Sea.
• Portfolio optimization: transfer of 9 perimeters to Mazarine Energy Romania finalized and contractual transfer of another 40 was signed.
• Expansion in the Black Sea region, by taking over the participation in the Han Asparuh perimeter in Bulgaria. The conclusion of the transaction is subject to certain previous conditions and is expected to take place by mid-2020.

Downstream Oil

• Major projects were completed, which required investments of about 130 million euro (cumulated over the years of implementation): the polycombustible unit, a closed fast drain system at the Petrobrazi coking unit and the modernization of the fuel storage tank at Arad.
• Negotiations for the partnership with Auchan Retail Romania for the opening of the proximity stores in the Petrom distribution stations are ongoing