OMV Petrom and ExxonMobil invest USD 1.5 bln in Black Sea

+ The two companies plan to invest many billions more in order to attain their goal of selling the natural gas discovered in the Black Sea’s Neptun block

OMV Petrom and America’s ExxonMobil have successfully finalized the second drilling campaign in the Neptun block where the two companies have invested a total of EUR 1.5 bln since 2008, Gabriel Selischi, OMV Petrom Board member for Upstream activity, stated on Thursday. OMV Petrom has contributed 50 per cent of that sum.

“We drilled seven wells in this block and most of them encountered gas pockets. We have sufficiently encouraging results to continue assessing the commercial viability. The final investment decision is estimated in approximately two years,” Selischi said, Agerpres informs.

According to him, since these are just gas pockets, the project is not influenced in any way by oil prices, which collapsed in recent years.

“We are on schedule with this project and we plan to continue its implementation starting in 2018, if commercial viability is proven. We don’t know as yet what solutions we will tackle. We will have to drill dozens of wells, to build a pipeline, so we are talking about investments running into several billion Euros or Dollars. I know there is a great deal of impatience around this project, however if you compare this project with the highway projects, especially the highways crossing mountains, you will see that we are making progress,” the OMV Petrom official added.

OMV Petrom Group in the red in 2015

OMV Petrom Group has moved in the red in 2015, reporting a negative net result of RON 690 M, compared to a net profit of RON 2.1 bln the year before, according to the consolidated results published by the company on Thursday.

The net result registered by OMV Petrom S.A. was a loss of RON 676 M, compared to the net profit of RON 2.103 bln in 2014. The loss per share was RON 0.0119 in 2015, compared to a profit per share of RON 0.0371 the year before.

“In 2015, the Group’s financial results were severely affected by the steep drop in oil prices. Upstream’s negative contribution was partially covered by the very good Downstream results, proving the benefits of our integrated business model. Throughout the year, we promptly answered the deterioration of market fundamentals and we successfully fulfilled our promises to lower costs and to maintain our competitive position, while lowering investment by 38 per cent compared to 2014,” OMV Petrom CEO Mariana Gheorghe stated in the company communiqué.

OMV Petrom would have obtained a net profit of RON 1.8 bln and a positive EBIT of RON 2.5 bln last year if it were not for the need to lower the accounting value of Upstream assets, as a result of the drop in oil prices, company officials stated at a press conference on Thursday.

No stock market reaction to OMV Petrom review

The price of Petrom shares remained almost unchanged on Thursday and the volume traded remained modest following the announcement concerning the losses registered by the company in 2015. At a press opportunity, company representatives pointed out that despite losses of nearly RON 700 M, the state collected taxes of over RON 11 bln, from excises and VAT, the taxes not being influenced by the drop in global oil prices. OMV Petrom registered last year the first loss since the Romanian company’s privatization, oil company representatives announcing losses of RON 690 M, in contrast to the RON 2.1 bln profit registered in 2014.

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