OMV Petrom net profit up 16 percent to RON 2 billion in H1 on higher crude price

The net profit of oil and gas producer OMV Petrom rose by 16 percent to RON 2 billion (EUR 455 million) in the first half of this year from the same period of last year, while sales added 19 percent to RON 12.2 billion (EUR 2.7 billion), driven by higher oil prices and a stronger US dollar.

Petrom’s second quarter profit fell by 29 percent year on year to RON 643 (EUR 145) million as the average Urals crude price fell by 7 percent to USD 106.7 per barrel from the second quarter of last year.

The CEO of OMV Petrom, Mariana Gheorghe, said the company will continue to invest annually between EUR 800 million to EUR 1.2 billion in the years to come to meet the strategic targets set up by the supervisory board through to 2021.

The clean EBIT in exploration and production moved up by 20 percent to RON 3 billion (EUR 683 million) in the first half, supported by a 4 percent increase for one barrel of Urals crude to USD 112.28. The company has boosted its exploration expenditure by 23 percent to RON 295 million (EUR 67 million), due to the joint offshore drilling in the Black Sea with ExxonMobil.

The stronger US dollar against the domestic currency allowed Petrom to reduce its production costs by 4 percent to USD 15.26/boe (barrel of oil equivalent). Total production of oil, gas and NGL in Romania fell by 2 percent to 31 million boe, while sales volumes fell by 1 percent.

The clean EBIT in gas and power has soared almost six fold to RON 164 million (EUR 37 million) due to changes in bad debt provisioning and higher gases extracted from storage in Q1. Petrom has also generated 0.05TWh in the first half from its Dorobantu wind park and received 100,496 green certificates. This has supported earnings as once certificate is currently trading at the maximum price of EUR 57. The gas sales remained flat although gas consumption in Romania shark by 3 percent in H1.

Petrom’s loss in refining and marketing widened in H1 as the clean EBIT fell almost five fold to a negative RON 237 million (EUR 54 million). This was caused by lower demand and the six-week shutdown of the Petrobrazi refinery, which pulled its utilization rate down to 61 percent.