* Q4 operating profit at 444 mln euros misses estimates
* Libyan output now returned to 70 pct of pre-war levels
* Business shifting to more lucrative E&P from refining
* 2013 dividend to be raised to 1.25 euros from 1.20
* Shares drop 3 percent
(Adds details on Libya, Rosebank, refinery outages, shares)
By Georgina Prodhan
VIENNA, Feb 19 Austrian oil and gas group OMV
said on Wednesday its fourth-quarter operating profit
more than halved as production and sales in Libya dropped to
almost nothing due to repeated disruption from oil-field
protests and port blockades.
Production is now running at about 70 percent of pre-civil
war levels, OMV said, and reaffirmed its 2014 group production
target range of 320,000 to 340,000 barrels of oil equivalent per
Libya accounted for about 10 percent of OMV's production
before the 2011 uprising that toppled Muammar Gaddafi.
OMV said it lost one-third of its production in Libya last
year, it produced almost nothing there in the fourth quarter and
the security situation remained very hard to predict.
Shares in OMV fell 3 percent to 32.74 euros by 1337 GMT,
lagging a weaker European oil and gas index.
Profits were also hit by refining margins close to record
lows due to sluggish economic recovery and persistent
overcapacity on European markets, and gas prices squeezed by
Quarterly operating profit - earnings before interest and
tax adjusted for special items and inventory holding gains or
losses (clean CCS EBIT) - fell 54 percent to 444 million euros
According to Thomson Reuters data, analysts had expected 461
million euros on average.
At its Exploration and Production (E&P) unit, operating
profit - which accounts for more than half of OMV's total - fell
63 percent to 257 million euros, mainly due to lower sales from
Libya and a New Zealand field shutting for refurbishment.
SHIFT TO E&P FROM REFINING
OMV is selling low-margin retail and refinery assets to
finance heavy investments in more profitable E&P, which will
account for about 3 billion of its planned 3.9 billion euros in
capital expenditure this year.
The head of the E&P division, Jaap Huijskes, said a final
investment decision on one of the company's major projects, the
Rosebank North Sea field it is developing jointly with Chevron
, would now be pushed back from this year to 2015.
He said OMV and Chevron were working intensively on reducing
the project's costs, estimated by OMV last year at $10 billion,
after Chevron said in November the development of the project
was not economically attractive.
OMV proposed raising its 2013 dividend to 1.25 euros per
share from 1.20 euros and said operating cash flow and planned
divestments would support future dividends as well as capital
The company said it was well placed after buying 2.65
billion euros' worth of assets from Norway's Statoil
last year to balance risks in North Africa, and an interim deal
to reduce the prices it pays Gazprom for gas.
OMV has historically agreed long-term gas-supply contracts
with Gazprom that were indexed to rising oil prices while spot
market gas prices have fallen. The two parties are working on a
final agreement to take effect from April.
In its Refining and Marketing division, OMV's operating
profit fell 37 percent to 92 million euros. Refining margins
would remain under pressure this year, OMV said, and economic
volatility in Turkey was challenging the profitability of its
Petrol Ofisi Turkish filling stations and lubricants unit.
OMV added that it planned a 40-day shutdown of its
Burghausen refinery in the fourth quarter of 2014 for a regular
inspection, a 30-day shutdown of its Petrobrazi refinery in the
second quarter for modernisation, and a 15-day shutdown of its
Schwechat refinery in the second quarter for cleaning.
In Gas and Power, OMV raised its operating profit by 35
percent to 80 million euros thanks to the interim Gazprom deal,
which was backdated to last April, as well as a similar
long-term gas-supply contract renegotiation with Statoil.
OMV said it would continue negotiations with Gazprom to try
to achieve full market-based pricing for the contracts.
($1 = 0.7272 euros)
(Editing by Michael Shields and Louise Ireland)