VIENNA (May 3): Austria's OMV expects Libyan oil production to remain stable in coming months and is sticking to its output target of 500,000 barrels per day (bpd) this year, the chief executive said on Friday.
The group made slow progress on its production goals, reaching 474,000 bpd by the end of March, as its business was hit by disruptions at Libya's El Sharara oil field and — to a lesser extent — Norway's Aasta Hansteen gas field.
Work at Libya's biggest oil field resumed in March after its latest disruption and OMV CEO Rainer Seele said he saw no sign that fighting in Libya would disrupt output again.
"Since we have started production,... we haven't seen any interruption in operations, transport or loading ports," he told Reuters.
Seele said he was aiming for an average production rate of 35,000 bpd in Libya. OMV would also increase its liquids output this year from newly bought fields in New Zealand, Malaysia and Abu Dhabi, he added.
In its downstream business, OMV said the refining margin — the company's earnings from turning crude oil into fuel and petrochemical products — fell to US$4 a barrel per end-March due to higher costs.
The margin would likely stay flat in the second quarter, Seele said. As a result, the group slightly lowered its full year guidance for the margin to under US$5 per barrel, from US$5 per barrel.
In the medium-term, the ratio should increase as OMV would benefit from new marine regulations that require ships to use cleaner fuel from 2020, the CEO said.
OMV posted a 7% fall in first-quarter core profit to 759 million euros (US$848 million), missing expectations. But analysts highlighted a robust cashflow.
The CEO said the group had so far spent 640 million euros on the Nord Stream 2 gas pipeline being built to supply Russian gas to Europe, and said it would support efforts to complete the project.
OMV has agreed to provide up to 950 million euros as one of five Western partners offering finance for the project that has faced opposition from the United States and some European states which say it makes Europe too reliant on Russian gas.
Asked whether he expected the pipeline to start at the end of the year, Seele said it depended on receiving a permit from Denmark on a missing segment of the route. But he added: "We are on schedule."
Nord Stream 2 said last month that it had applied for another route in Danish waters. Denmark can veto the initial option based on a law allowing it to ban the project from passing through its territorial waters on security grounds.
Regarding OMV's purchase of Siberian assets from Gazprom, Seele said he hoped to agree on a price in summer.
(US$1 = 0.8954 euros)