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OMV/Petrom 4Q 09 result presentation takeaways

Upstream: Avg. upstream opex at Petrom significantly decreased from USD 18.3/boe in 2008 to USD 15.1 in 2009, profiting from lower energy consumption and Petromservice integration.

Exploration capex make up EUR 400 mn of total 2010 capex guidance of EUR 2.8 bn.

Production rate to stay stable at 325k boepd in 2010 and thereafter - without acquisitions. Reduction of goal from 350k boepd to 325k boepd due to problems at Mamu gas field in RO and Strassof in Austria. Bureaucratic hurdles at Komsomolskoe (KAZ) and OPEC quotas in Libya kept production below potential, but this should come during 2010.

Pearl acquisition in Northern Iraq will only add to production in next 3-5 years. RRR at OMV 140%, at Petrom 70%, overall 85%, better than planned. Overall 2009 cash effect on oil price hedging was EUR 240 mn.

Downstream:

Refining in Romania will only improve if overall macro conditions for industry improve. The downsizing of the Petrom refinery modernization (EUR 750 mn investment amount instead of EUR 1.5 bn as initially planned) is permanent. Capacity will be downsized to 4.2 mntpa (from currently 4.5 mntpa and instead of increasing it to 6 mntpa), because the refinery will process Romanian-produced crude oil only. OMV has givenup the goal to make the refinery a world-class plant with competitive profitability.

The final decision on Arpechim will be made in 2 years (closure, sale, conversion to storage). From the capacity, Petrobrazi will be sufficient.

Fuel demand in Romania saw a drop in 4Q 09, no further increase in retail market share increase expected.

G&P:

There will be more incentive on the Romanian government to liberalize gas prices once Arad-Szeged pipeline is in place and Brazi power plant is in operation - i.e. next year. This will be an important profit driver as Romania gas production makes up 1/3 of total OMV group upstream production.

Corporate:

Effective Tax rate will be 40% should refining and Borealis stay weak (because share of tax intensive E&P higher)Currently no changes in litigation charges to be expected at Petrom

Sursa: http://www.rciro.ro

Tags: petrom production

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