OMV Petrom recorded in the first six months sales of 10.72 billion lei, down 7% compared to the result in the first half of last year, and had a net profit of 1.9 billion lei in this first semester, down 22% compared to the first six months of 2013, when it was 2.43 billion lei, writes Mediafax.

The net profit attributable to OMV Petrom shareholders after deduction of net profit attributable to minority interests was 1.38 billion lei in the first semester, down 42% from the 2.39 billion lei in the first half of last year, indicates the oil company.

Production costs increased by 30%

OMV Petrom production was 30% more expensive, on the one hand because of the 1.5% tax on special constructions, on the other hand because of personnel costs as result of implementing a new Collective Work Agreement.

The company specifies that an unfavorable exchange rate and declining production in Kazakhstan have contributed to the rise with one third of production costs and to the 42% erosion of the net profit attributable to shareholders. An adverse effect on the financial results had the stopping of Petrobrazi in Q2 of this year for upgrading works. In fact, the work on the refinery and in the Black Sea increased the investments done by the company by 54% in comparison with the first half of last year.

Mariana Gheorghe, CEO of OMV Petrom, on oil company’s investment said:  “In the first half of 2014 we continued to implement our investment projects in accordance with the company strategy. Thus, we have successfully completed, within the time and budget, Petrobrazi modernization project, started in 2010, amounting to 600 million euros, which will allow us to improve refining margins and to better meet market demand.

In E & P (exploration and production – ed.n), drilling operations and important repairs helped stabilize domestic production. In offshore shallow watters, Marina-1 exploration rig discovered the largest deposit of oil in the Black Sea, from privatization. In deep waters we completed mobilization of Ocean Endeavor platform, which allowed us to start drilling at Domino-2 in Neptun block in order to confirm the initial gas discovery and to identify additional opportunities for exploration.

Reduced demand for oil products and gas, combined with additional taxation introduced in 2013-2014, largely neutralized the benefits resulting from the liberalization of gas prices. However, given the long cycle of the investment in oil and gas sector and assuming a future fiscal and regulatory framework conducive to investment, we will continue the projects, focusing mainly on the exploration and redevelopment of fields, both onshore and offshore.”