Austrian oil and gas company OMV expects to take a 1.8 billion euros impairment charge due to low oil prices, when it announces its fourth quarter 2015 results in February.
“Further reductions in the price of oil and gas, together with increased market volatility have caused us to further review our price assumptions for both the short and longer term. Our assumptions for Brent crude price are now for 2016 at USD 40/bbl, for 2017 at USD 55/bbl, for 2018 at USD 65/bbl, for 2019 at USD 70/bbl and then USD 75/bbl from 2020 onwards,” OMV said in its trading statement on Friday.
OMV further said that its gas price assumptions have been aligned reflecting the current depressed European market conditions.
These revised assumptions, OMV said, have required impairments to asset valuations in Upstream, covering assets under production and development, as well as exploration assets, to be recognized during Q4/15 in the amount of approx. EUR 1.5 bn, thereof approx. EUR 0.4 bn attributable to producing assets in OMV Petrom.
Additionally, OMV added, a special charge of approx. EUR 0.3 bn will be shown in Downstream. This relates primarily to a further provision charged against the Gate LNG obligation and associated transportation commitments. This has been necessitated by a revision to our long-term business assumptions for the gas market.