OMV profits boosted by crude price and production increase, Borealis

London, (Quantum Commodity Intelligence) – Austrian integrated oil and gas company OMV reported a 4.8% increase in upstream production for Q1 at 495,000 boe/d and lowered its outlook for products margins in Europe for the remainder of the year, in a quarterly statement released Thursday.

The company's operating profits were boosted by improved crude prices and higher sales volumes following its acquisition of the chemical producer Borealis though, leading to a 24% year-on-year rise in profits to €870 million for the first quarter.

First-quarter oil and gas production was helped by higher output from Libya, Malaysia, and Tunisia, but the company anticipates a lower whole-year performance of 480,000 boe/d, which depends heavily on the security situation in Libya and production cuts imposed by governments.

Libyan production was at full capacity during the entire quarter, while output in the same period last year had been affected by a force majeure situation, said the company.

Output in Malaysia and Tunisia grew on the back of the commissioning of new gas fields.

However, natural decline in Romania and Austria, drilling activities in Norway, and pipeline pressure limitations in Russia stifled production growth to some extent.

OMV had previously forecasted an uplift in margins from its marketing arm this year, but is now predicting lower unit profits than in 2020 despite an expected increase in sales volumes.

The company operates around 500,000 b/d of refining capacity, for which the utilisation rate was 13 percentage points lower on the year at 81% in Q1 but on par with that for Q4.

Its refining margin declined slightly compared to Q4 to $1.68/b from $1.71/b.

This was down by two-thirds from Q1 2020 however, as higher crude prices and persistently weak demand dragged crack spreads lower, said the report.