OMV earnings surge by more than 30%

Austrian oil and gas group expects the Brent oil price to average $74 a barrel in 2018, up from a previous forecast of $70

OMV was earlier this year awarded two stakes worth $1.5bn in concessions offshore Abu Dhabi. Reuters

Austrian oil and gas group OMV, in which Abu Dhabi is the second-biggest shareholder, lifted its third-quarter profit by 31 per cent, largely due to to higher oil prices and lower production costs, and said it expects a strong rise in output for the rest of the year.

Unlike other European energy groups, OMV is sticking with fossil fuels but shifting its focus from oil to gas because of its lower carbon dioxide emissions.

The jump in third-quarter earnings announced on Wednesday echoed soaring profits at oil majors BP, Total and Repsol, all boosted by oil prices that hit a four-year high in the period.

OMV said it now expects the Brent oil price to average $74 a barrel in 2018, up from a previous forecast of $70, Reuters said.

Shares in the company were up 3.3 per cent at €48.50 in early trade.

OMV said daily production in the fourth quarter will be "slightly higher" than the 437,000 barrels of oil equivalent per day (boed) in the first quarter, its strongest this year.

The company produced 406,000 boed in the third quarter, down from 419,000 boed in the second quarter, largely because of maintenance work in Russia and Austria and the sale of its Pakistan exploration business.

However, OMV forecast output to reach 500,000 boed by the end of the year, helped by the start-up of production at Abu Dhabi-owned Adnoc's Sarb and Umm Lulu offshore oilfields and at the Aasta Hansteen gasfield in Norway.

Production and loading of crude from Umm Lulu and Sarb fields began this month, with commercial shipments to start next month, according to a company spokesman.

The grade known as Umm Lulu is produced by Adnoc jointly with Spanish energy company Cepsa and OMV, which each have a 20 per cent stake in the fields.

_______________

Read more:

Adnoc begins production and export of Umm Lulu crude grade

As D-Day looms for $1 trillion Norway fund, oil and gas markets on lookout

_______________

Its main profit measure, which excludes special items and inventory gains or losses, rose nearly a third year-on-year to €1.05 billion (Dh4.37bn) in the third quarter, beating the average forecast of €929 million in a Reuters poll of analysts.

Net income attributable to stockholders declined to €221m from €439m a year earlier, due to a significant increase in taxes, the group said. Its tax rate rose to 46 per cent from 21 per cent, largely because of high taxes in Norway and Libya.

OMV, which targets growth in low-cost countries outside Europe and has declared South East Asia a new core market, confirmed that it expects to close the purchase of gas fields in New Zealand at the end of the year.

The company also said it was continuing negotiations with Malaysian Sapura Energy, in which it wants to purchase a 50 per cent stake.