Upstream
In the Upstream Business Segment, OMV delivered a resilient performance despite an overall challenging environment. Despite COVID 19-related restrictions, production reached 463 kboe/d, with production cost at USD 6.6/boe in line with last year and the one-year Reserve Replacement Rate slightly above 100%.
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2020 |
2019 |
∆ |
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Clean Operating Result |
in EUR mn |
145 |
1,951 |
(93)% |
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Special items |
in EUR mn |
(1,282) |
(71) |
n.m. |
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Operating Result |
in EUR mn |
(1,137) |
1,879 |
n.m. |
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Capital expenditure 1 |
in EUR mn |
1,090 |
2,070 |
(47)% |
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Exploration expenditure |
in EUR mn |
227 |
360 |
(37)% |
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Exploration expenses |
in EUR mn |
896 |
229 |
n.m. |
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Production cost |
in USD/boe |
6.58 |
6.61 |
(0)% |
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Total hydrocarbon production |
in kboe/d |
463 |
487 |
(5)% |
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Total hydrocarbon sales volumes |
in kboe/d |
439 |
463.8 |
(5)% |
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Proved reserves as of December 31 |
in mn boe |
1,337 |
1,332 |
0% |
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Average Brent price |
in USD/bbl |
41.84 |
64.21 |
(35)% |
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Average realized crude price 2 |
in USD/bbl |
37.97 |
61.66 |
(38)% |
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Average realized gas price 2 |
in USD/1,000 cf |
3.12 |
4.08 |
(23)% |
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Financial performance
The clean Operating Result dropped sharply from EUR 1,951 mn to EUR 145 mn in 2020. Net market effects had a negative impact of EUR (1,846) mn as a consequence of materially lower average realized oil and gas prices. A reduced operational performance lowered returns by EUR (245) mn and was mainly a consequence of the force majeure situation and the ensuing liftings shortfall in Libya during most of the year. Significantly higher sales volumes in Malaysia had a strong balancing effect. Depreciation decreased by EUR (286) mn due to reduced production, impairments, and reserve revisions. In 2020, OMV Petrom contributed EUR 1 mn to the clean Operating Result compared to EUR 599 mn in 2019.
Net special items amounted to EUR (1,282) mn in 2020 (2019: EUR (71) mn) and were mainly related to the impairments triggered by OMV’s revision of its long-term price assumptions for Brent crude oil. The Operating Result contracted sharply to EUR (1,137) mn (2019: EUR 1,879 mn).
Production cost excluding royalties was at the same level on average in 2020 as in 2019, at USD 6.6/boe. Further cost saving initiatives and reduced activity during the COVID-19 lockdown were able to offset the incremental effect stemming from lower production. At OMV Petrom, production cost also remained stable at USD 10.9/boe.
The total hydrocarbon production volume decreased by 24 kboe/d to 463 kboe/d, primarily due to lower production in Libya as a result of the force majeure situation. Production in Malaysia rose substantially and was able to offset some of the reduced production in Romania, New Zealand, and Russia. OMV Petrom’s total production was down by 7 kboe/d to 145 kboe/d mainly due to natural decline. Total sales volumes fell to 439 kboe/d (2019: 464 kboe/d) in line with production volumes.
In 2020, the average Brent price reached USD 41.8/bbl, a substantial decrease by 35%. The Group’s average realized crude price dropped by 38%. The average realized gas price in USD/1,000 cf receded by 23%.
Capital expenditure including capitalized E&A was cut back to EUR 1,090 mn in 2020 (2019: EUR 2,070 mn) following a widespread effort to reduce spending. Capital expenditure in 2019 included the purchase of a 50% interest in SapuraOMV for USD 540 mn. Organic capital expenditure was primarily directed at projects in Romania, Norway, the United Arab Emirates, and New Zealand. Exploration expenditure was EUR 227 mn in 2020, and could thus be reduced by 37% compared to 2019. It was mainly related to activities in Norway, New Zealand, Romania, and Malaysia.
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2020 |
2019 |
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Oil and NGL |
Natural gas 1 |
Total |
Oil and NGL |
Natural gas 1 |
Total |
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in mn bbl |
in bcf |
in mn boe |
in mn boe |
in mn bbl |
in bcf |
in mn boe |
in mn boe |
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Romania 2 |
23.4 |
146.5 |
27.1 |
50.5 |
24.1 |
156.2 |
28.9 |
53.0 |
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Austria |
3.8 |
24.9 |
4.2 |
8.0 |
4.0 |
29.2 |
4.9 |
8.9 |
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Kazakhstan 2 |
2.1 |
2.0 |
0.3 |
2.5 |
2.1 |
1.8 |
0.3 |
2.4 |
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Norway |
15.1 |
97.5 |
16.2 |
31.3 |
16.6 |
90.0 |
15.0 |
31.6 |
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Libya |
2.4 |
– |
– |
2.4 |
11.1 |
– |
– |
11.1 |
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Tunisia |
0.6 |
7.0 |
1.2 |
1.7 |
0.8 |
3.2 |
0.5 |
1.4 |
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Yemen |
1.3 |
– |
– |
1.3 |
1.8 |
– |
– |
1.8 |
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Kurdistan Region of Iraq |
1.0 |
14.6 |
2.4 |
3.4 |
0.9 |
14.2 |
2.4 |
3.3 |
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United Arab Emirates |
8.4 |
– |
– |
8.4 |
8.1 |
– |
– |
8.1 |
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New Zealand |
3.8 |
57.7 |
9.6 |
13.4 |
4.6 |
65.2 |
10.9 |
15.5 |
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Malaysia 2 |
2.7 |
53.3 |
8.9 |
11.6 |
2.1 |
15.5 |
2.6 |
4.7 |
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Russia |
– |
208.4 |
34.7 |
34.7 |
– |
218.0 |
36.3 |
36.3 |
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Total |
64.7 |
612.0 |
104.7 |
169.4 |
76.1 |
593.1 |
101.7 |
177.9 |
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Reserves development
Proved reserves (1P) as of December 31, 2020, increased to 1,337 mn boe (thereof OMV Petrom 1: 473 mn boe). With a one-year Reserve Replacement Rate (RRR) of 102% (2019: 135%), a value of over 100% has now been achieved five years in a row. The three-year RRR reached 138% (2019: 166%). Proved reserves remained stable despite the challenging market environment. Major contributions came from successful drilling and development activities in the United Arab Emirates, Russia and Norway, and the positive production performance in Russia, Norway and New Zealand.
Proved and probable reserves (2P) increased to 2,365 mn boe (thereof OMV Petrom 1: 761 mn boe), remaining broadly stable as well, mostly as a result of successful development activities in Malaysia and New Zealand.
1 OMV Petrom covers Romania and Kazakhstan.