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September 29, 2022

Petrom back in the green after drastically cutting investments

OMV Petrom, leader of the Romanian petroleum market, reported in Q1 this year a net profit of RON 288 M, according to the data presented by the company. The profit is 17 percent lower than the one registered in the same period last year, but follows a quarter in which the company registered RON 1.68 bln in losses (Q4 of 2015).

In the first three months of this year, OMV Petrom registered RON 3.55 bln in sales, down by 17 percent year-on-year.

The Group’s EBIT operating profit stood at RON 343 M, down by 21 percent year-on-year, but following a negative EBIT of RON 1.84 bln in Q4 of 2015.

“Investments dropped to RON 769 M in Q1 this year, from RON 1 bln in Q1 last year. Upstream investments (RON 710 M) represented 92 percent of the total value of investments in Q1, being 30 percent lower than the level registered in Q1 of 2015, since the process of prioritising investments as a reaction to the drop in oil prices continued. Upstream investments were channelled toward finalising the deposit redevelopment projects, major overhauls and drilling, modernising surface facilities, as well as the Neptun Deep project,” the company communiqué shows.

“In the first three months this year, the Group’s financial results were affected by the steep drop in oil prices. In response, we continued to implement operating cost reduction and capital expenditure reduction measures. Investments were prioritised in relation to their potential to generate value over the long term, dropping by around 28 percent compared to Q1 of 2015. Naturally, this impacted the Upstream’s overall production of hydrocarbons. (…) Taking into account the persistence of an environment with low prices, we will continue to adjust our activity level, while at the same time maintaining a solid financial position and protecting the extended cash flow. In this context, a stable, predictable and investment-friendly fiscal and regulatory framework is even more important in order to be able to continue investments, both in view of managing the natural decline and of subsequent onshore and offshore developments,” Petrom CEO Mariana Gheorghe pointed out in the company’s communiqué.

The company managed to register profit following the good results reported by the Downstream segment, which made up for the losses registered on account of low oil prices and the drop in oil production.

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