Romania's OMV Petrom closes 350 oil wells, reduces output by 4%

Romanian oil&gas company OMV Petrom announced yesterday that it suspended the production of 350 of its onshore oil wells in 2015 and could close another 350 wells this year, due to the low oil prices. A total of 1,000 of the company’s 7.500 oil wells in Romania risk being closed if the oil prices remain low and don’t cover these wells’ production costs. OMV Petrom will thus further reduce its oil output in Romania by some 4%, after a 2% decline in 2015, according to Gabriel Selischi, OMV Petrom’s director in charge of upstream activities, reports local Economica.net. The group also reduced its investments (CAPEX) by 38%, to EUR 876 million, in response to the adverse market conditions. The headcount went down by some 900 employees last year, to 16,000, and personnel restructuring may continue if the market conditions remain negative. OMV Petrom ended the year with EUR 155 million losses, its first losses since Austrian group OMV took over the company from the Romanian state in 2004. However, the losses were mainly determined by one-off costs related to asset impairments, as the group wrote down the value of its upstream assets to reflect the lower oil prices. The one-off expenses totaled EUR 605 million. Excluding these costs, the company would have made a net profit of some EUR 567 million, down by half compared to 2014. The group shouldn’t register any more such costs if the oil price stabilizes around USD 40 per barrel this year, according to Mariana Gheorghe, OMV Petrom’s CEO. editor@romania-insider.com