Low oil price pushes Austria’s OMV into red

Low oil price pushes Austria's OMV into red
OMV's head office in Vienna. Photo: Daniel Zanetti/Wikimedia
Austria's OMV is the latest oil and gas firm to feel the pinch from the stubbornly low price of crude, sliding to a hefty loss in the third quarter.

OMV said on Thursday that because of around €1 billion ($1.1 billion) in writedowns related to cuts in its forecasts for the oil price, its net loss was €477 million.

It expects the price for Brent, the international benchmark, to average $55 per barrel in 2016, rising to $70 in 2017, $80 in 2018 and $85 in 2019. Brent was last trading in London at $48.70.

The revised forecasts required impairments to asset valuations, including those in production, development and exploration, OMV said in a statement.

The halving of the price in the second half of 2014 and its failure to recover since has forced oil companies worldwide to slash jobs and spending and cancel projects.

In the year-earlier period OMV posted a net profit of €344 million. Sales in the third quarter this year slumped 35 percent to €5.9 billion.

Its daily oil production was down six percent to 292,000 barrels, with a drop in Libya and Yemen due to unrest partially offset by rises in Norway and New Zealand.

Stripped of the one-off effects, the results were better than expected by analysts and OMV shares were up 0.86 percent by mid-morning in Vienna.

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