Petrom posts declining revenues and profit at three months in 2014

Following last year’s performance when OMV Petrom recorded a profit of over 4.82 billion lei – the biggest in history, the first quarter of 2014 has brought a decline in both revenues and profit. The company has today posted the financial results corresponding to Q1 showing sales revenues  of 5.3 billion lei, 9 percent below the value recorded within the same period of 2013, mainly due to lower sales volumes of crude oil, gas and electricity and a lower crude price environment. Net profit has also narrowed, dropping by 19 percent Year-on-Year – from 1.33 billion lei to nearly 1.08 billion lei.

“In Q1/14, our financial performance reflected the higher fiscal burden and weaker market environment. Depressed demand in the gas, power and fuels markets combined with lower refining margins were only partially compensated by the operational excellence and cost management initiatives across all divisions”, stated Mariana Gheorghe, CEO Petrom OMV, in a press release.

Production indicators remained stable overall, with small variations on certain segments. Hence, the group’s hydrocarbon production was 16.36 million boe, down by 1 percent over Q1 in 2013, reflecting the lower production in Kazakhstan which offset the higher volumes in Romania (15.44 million boe compared to 15.35 million boe). Domestic crude oil production was about 7.01 million bbl, broadly in line with last year’s volumes (7.03 mn bbl), while domestic gas production grew by 1.4 percent to 8.4 million boe, mostly supported by the new wells put on stream in the Totea and Mamu fields. In Kazakhstan, oil and gas production amounted to 0.92 million boe, which is 17 percent lower compared to the same period of 2013, reflecting the natural decline of key fields as well as some technical constraints (associated gas limitations and water production), as explained by the related company report.

According to the same source, the group’s investments in Q1 came some 1.25 billion (up by 25 percent yoy) of a total of 6 billion lei budgeted for the entire year. “Going further, we will continue to deliver on our strategy, supported by a significant investment program of more than RON 6 billion this year, subject to an investment-friendly environment and solid market fundamentals”, added Mariana Gheorghe.