VIENNA: Austrian oil and gas company OMV on Monday announced it would write down one billion euros (1.13 billion U.S. dollars) of its assets on the back of continuously low oil prices.
The company said in a statement its third-quarter production and sales had, as a result of the trend, dropped noticeably, and it did not expect a significant reversal of the slump in the near future.
OMV said it had produced 292,000 barrels of oil equivalent per day (boe/d) in the third quarter, down from the 307,000 boe/d the previous quarter, and from 311,000 year-on-year.
In February this year, the company revealed its “fit for fifty” strategy, in that it would structure itself so as to remain profitable even at a price of 50 U.S. dollars per barrel. However, it has now faced an unexpectedly long low-price trajectory — the Brent Crude price average of 50.47 U.S. dollars over the past three months only half of what it was a year ago.
The company has thus been prompted to sell a stake of up to 49 percent in its wholly-owned subsidiary Gas Connect Austria. The subsidiary was involved in the construction and operation of natural gas high-pressure pipelines in Austria. OMV said selling the stake would “optimize the portfolio and strengthen the group’s cash flow and balance sheet.”
It said strong interest had already been shown and it expected the transaction would be signed off on over the course of 2016.
