For more from the Reuters Central European Investment
Summit, click on:
http://www.reuters.com/summit/CentralEuropeanInvestment09?pid=500
* Production target for 2010 will be "difficult"
* Margins may improve but not to 2008 levels again
* Apart from Ofisi, eyes upstream acquisitions
(Adds Petrol Ofisi, background, more quotes)
By Eva Komarek
VIENNA, Sept 28 (Reuters) - Oil and gas group OMV <OMVV.VI>
is sticking to its 2010 production target but it could be
difficult to meet because of weakness in gas demand in Romania
and OPEC quotas, its chief executive said on Monday.
Vienna-based OMV, one of the biggest energy companies in
emerging Europe, hopes to produce 350,000 barrels of oil
equivalent per day next year.
"We have also always added that this will be difficult to
achieve because we are affected by the OPEC quota and we are
also affected by demand weakness in Romania for the gas market,"
CEO Wolfgang Ruttenstorfer told the Reuters Central European
Investment Summit.
"For those two reasons it might also mean that we can't
reach the 350,000 (boe/d), but this is our target," he said.
Ruttenstorfer added that the outlook was tough for refining
margins. OMV's refining margins fell by 75 percent in the second
quarter compared to the same period a year ago.
"I see those weak margins for quite some time,"
Ruttenstorfer told the summit, held at the Reuters office in
Vienna.
"We hope over the winter there might be some improvements
because heating comes back and some other factors help. But I
don't expect refining margins as we had them in 2005-08. This
was paradise for refining."
PETROL OFISI
Ruttenstorfer declined to rule out financing options
including a capital hike if OMV goes ahead with plans to expand
its stake in Turkey's Petrol Ofisi. He said OMV would announce
how it would fund the deal when and if it progresses.
OMV, which already owns 42 percent of Petrol Ofisi, said
last month it wanted to build up Turkey as its third strategic
centre, after an attempt to take over Hungarian group MOL
<MOLB.BU> went awry, leaving it with $2 billion in spare cash.
But spending some of that money could take it past a
self-imposed "gearing" debt target of 30 percent and as such
there have been reports it is preparing to raise another 800
million euros to fund the purchase by selling new shares.
"We would only accept it (a rise above 30 pct) if there is a
view than we can reduce it to 30 percent. 50 pct was acceptable
(in the past)," Ruttenstorfer said.
OMV, however, also has 2.4 billion euros ($3.5 billion) from
bond auctions to fund acquisitions and has shareholder
permission to sell up to around 2.2 billion euros worth of new
shares at current prices.
In terms of expansion, Ruttenstorfer said OMV would stick to
areas where it is already in exploration and production but had
no fixed targets.
"Anything apart from Petrol Ofisi would be upstream," he
said. "That's also the area where you earn the money which is
the driver for your cashflow."
In terms of the oil price, Ruttenstorfer said he saw it at
$60-80 over the next three years but that it could fall below
that in the short term. U.S. crude <CLc1> was trading at just
over $65 a barrel on Monday.
(Writing by Sylvia Westall; editing by Patrick Graham)
