OMV Posts Q3 Loss, Closes Petchem Purchase
Austrian oil and gas firm OMV suffered a €487mn ($573mn) net loss in the third quarter, it said on October 29, compared with a €425mn profit a year earlier, after being stung by weaker prices.
OMV also took on €594mn ($696mn) in write-offs after lowering its Brent oil price assumptions. It expects the benchmark to average $40/b this year, down from $64/b in 2019, and forecasts that its average realised gas price will fall to €10/MWh, from €11.9/MWh.
The company's current cost of supply (CCS) earnings tumbled 67% year on year to €317mn, on the back of €24mn in upstream losses. Its exploration and production business turned a €449mn profit in Q3 2019.
OMV sold its oil at $42.94/b in the three months ending September 30, down 37% yr/yr, and its gas at $2.64/'000 ft3, down 27%. Production fell to 444,000 barrels of oil equivalent/day in the three months, from 480,000 boe/d a year earlier, as a result of a 22% decline in liquids output to 165,200 boe/d. But gas extraction grew by 4%, arriving at 150bn ft3.
OMV expects full-year output to average 450,000-470,000 boe/d, depending on the situation in war-torn Libya and the enforcement of Opec+ production cuts.
The company's downstream business performed better, with clean CCS earnings falling only 32% to €335mn. It blamed the decline on lower demand for jet fuel, but this was partly offset by a 22% increase in gas sales to 33.3 TWh. Some of its peers have been less fortunate, with Eni reporting a 86% decline in refining earnings on October 28.
OMV is shifting its focus towards gas and petrochemicals and away from oil – a strategy it says will make its margins more robust while also reducing its emissions. The company announced separately on October 29 it had completed a $4.7bn deal with the UAE's Mubadala to expand its stake in Vienna-based plastics giant Borealis from 36% to 75%.