Romania's top oil and gas group, OMV Petrom [BSE:SNP], said on Tuesday it
expects to face challenges in the gas sector and post a negative result from its
power business this year.
"We aim to mitigate this by consolidating Brazi
power plant’s position in the balancing and ancillary services markets,
capitalizing on the plant’s flexibility," the blue-chip company said in a
statement.
Gas demand in Romania is expected to further decrease which
will lead to increased competition and margin pressure, so the company plans to
optimise its gas value chain to address challenges in the market and maximise
value creation.
In the Exploration and Production (E&P) segment, OMV
Petrom plans to continue its intensive operational activities, performing more
than 1,600 workovers, drilling more than 140 wells, of which more than half are
dedicated to field redevelopment projects, and bringing four redevelopment
projects into the execution phase by year-end.
The company plans to
resume a drilling campaign on its Neptun Deep offshore block in mid-2014 while
for the Midia block it has scheduled seismic data interpretation.
The
company also said it will optimise its E&P portfolio through partnerships
and will pursue exploration drilling under onshore partnerships with Hunt Oil
and Repso.
In the Refining and Marketing segment, OMV Petrom plans to
shut down the Petrobrazi refinery for 30 days starting at the end of May in
order to upgrade the diesel hydrotreater and fluid catalytic cracking conversion
units. This will improve product yields and energy efficiency.
Under a
fuel terminal network optimisation programme, operations started at the revamped
Bacau terminal in the first quarter while the Cluj terminal reconstruction will
commence in the second quarter.
OMV Petrom also said it will further
pursue stringent cost discipline and optimization of the downstream business.
The group's consolidated earnings before interest and taxes (EBIT) fell
7.0% on the year to 1.47 billion lei ($456.6 million/331.9 million euro) in the
the first quarter of 2014, while sales declined by an annual 9.0%.
OMV
Petrom has said it sees net profit falling 18.3% to 3.936 billion lei in
2014.
OMV Petrom was trading down 0.41% at 0.46 lei by 1306 CET on the
Bucharest Stock Exchange on Tuesday.