N. Africa, Mideast turmoil sinks OMV profit

Austrian oil and gas giant OMV reported Wednesday a drop in profit in its second quarter results due to the political unrest in North Africa and the Middle East.

Bottom-line net profit sank 26 percent to 269 million euros ($386 million) in April-June from 365 million in the previous quarter, OMV said in a statement.

In the same period last year, profits stood at 338 million euros.

Underlying profits, as measured by earnings before interest and tax (EBIT), also dropped by 29.7 percent quarter-on-quarter and by 12 percent year-on-year to 567 million euros.

"The second quarter brought multiple challenges some of which we were not able to influence," CEO Gerhard Roiss said in a statement.

"The political instability in North Africa and the Middle East is still prevailing, costing us a significant amount of production every day."

"The loss in volumes could not be offset by higher crude prices," he added.

Production in the second quarter fell to 275,000 barrels of oil equivalent (boe) per day from 318,000 boe per day in the same period last year, OMV said.

In Libya, it was halted in March due to the turmoil and was not expected to resume this year, while further production interruptions in Yemen -- where a pipeline was damaged earlier this year -- were possible.

Sales meanwhile stood at 7.96 billion euros in April-June, down from 8.07 billion euros in the first quarter, but up 39 percent year-on-year.

For the rest of the year, OMV predicted further volatility in the markets with lower production levels compared to 2010, due to the continuing unrest in the North Africa and Middle East region

AFP

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