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OMV: Total Production Declined by 14%

Published: July 22, 2011; 12:00 · (Vindobona)

In the second quarter, the Austrian oil and gas company registered a significant drop in production. Sales volumes in the gas business increased by 43%.

OMV: Total Production Declined by 14% / Picture: © OMV AG

Due to the unrest in the Arabic countries OMV’s total production continued to decline in the second quarter of the year. Compared to the first three months, the company registered a 10% drop from 304,000 to 275,000 boe/d (barrel oil equivalents per day). Against the second quarter of 2010, production declined by almost 14%. This was announced by the company on Friday in its trading statement on the second quarter of 2011.

The conflicts and unrest in Libya and Yemen resulted in a decline in oil production of 24,000 bbl/d (barrel per day) compared to the previous quarter and of 39,400 bbl/d year-on-year. The export pipeline in Yemen, which had been attacked in the first quarter of the year, was finally repaired in July 2011. However, re-establishing production might still take some time, OMV announced.

The company’s refining margin weakened further versus the first quarter due to reduced middle distillates spreads and increased crude prices, which led to higher costs for own crude consumption. The weakening of the US dollar against the euro has burdened the quarterly result as the increase in oil price in euro terms was much lower than in dollar terms. Exploration expenses exceeded the level of the first quarter by approximately € 125m, mainly due to the write-off of unsuccessful wells in the UK and Australia as well as the write-off of an exploration license in Kazakhstan which was partly treated as a special item.

Sales volumes in the OMV’s gas business increased by 43% year-on-year and amounted to 4.69 billion cubic meters of which the Romanian subsidiary Petrom accounted for 1.05 billion cubic meters.