Austrian OMV Makes Q1 Loss of $53.3mn

Austrian energy company OMV made a loss of €49mn ($53.3mn) in Q1 2017, up from last year's loss of €55mn for the same period, it said May 11, owing mainly to favourable currency movements and selling more production at a higher price.

Its upstream profit was €505mn compared with a loss of €102mn while its downstream profit was €540mn in the quarter, on better refining margins. It was more than double last year's €232mn. Transmission tariffs however were cut, so earnings from gas pipeline operations were down and will remain lower for this year. Natural gas sales volumes are expected to be slightly higher in 2017 compared to 2016, but with lower margins owing to oversupply.

CEO Rainer Seele (pictured below) said that production was at a ten-year-high of 335,000 barrels of oil equivalent/day while the average barrel of oil equivalent now cost under $9 to produce.

 (Credit: OMV)

And in downstream, he said: "We captured the benefits of a strong market environment along the entire value chain. The refinery utilisation rate reached a high of 96%, and the OMV indicator refining margin remained strong at $5.4/b. The petrochemical business and Borealis strongly contributed to this favourable result. Free cash flow after dividends marked a record high of €1.3bn in a $54/bbl oil price environment." 

This year it said it expects the average Brent oil price to be at $55/b. The gas market environment in Europe continues to be characterised by oversupply. However, average gas prices on European spot markets are expected to show an increase in 2017 compared with 2016, since there was a cold winter in Europe in the first quarter of 2017.

William Powell