Austrian oil company OMV has reported a net loss for the last quarter of 2014, citing turbulent year for the industry, with oil prices falling by roughly 50% in the second half of the year and security issues in Libya and Yemen.
The company’s net loss in the fourth quarter of 2014 was 308 million euros, versus a reported net loss of 78 million euros in the corresponding quarter of 2013.
OMV reported that its production increased by 15% compared to the 4Q 2013 levels, mainly reflecting contribution from the company’s assets in Norway.
Exploration expenses decreased to 64 million euros from 221 million euros in Q4/13, as the corresponding quarter of last year included write-offs in the Kurdistan Region of Iraq and in Norway.
In line with its industry peers, the company is responding to the unfavorable market conditions – low oil prices and Libyan uncertainty – by reducing capital expenditure.
OMV’s capex in 2014 decreased to 3.8 billion euros from 5.2 billion euros in 2013. Worth noting, in 2013 investments included the purchase of Statoil assets.
In its quarterly report, the company has said that capex for 2015 is expected to be in the range of 2.5 to 2.8 billion euros.
“OMV has started a program to ensure the company’s fitness for a potentially prolonged low oil price environment by implementing cost cutting measures and focusing on capital efficiency,” the company has said.
Upstream capital expenditure for 2015 is expected to be roughly 80% of total Group capex and includes the following major investment projects: Gullfaks, Aasta Hansteen, Edvard Grieg and Gudrun in Norway, field redevelopments in Romania, Nawara in Tunisia and Schiehallion in the UK.
“While we remain committed to the major projects expected to contribute to our previously stated 2016 production target of ~400 kboe/d, the changes to the investment program will inevitably lead to a delay in reaching this production level,” OMV added.
Offshore Energy Today Staff