November 7, 2013 / 9:46 AM / in 4 years

UPDATE 2-OMV cuts production outlook on Libya, Yemen security

* 2013 production now seen “somewhat below” 2012

* Refining margins seen historically low for rest of 2013

* Shares down 1.6 percent (Adds shares, analyst comment, details on mid-term production, Gazprom, Bayernoil)

By Georgina Prodhan

VIENNA, Nov 7 (Reuters) - Austrian oil and gas group OMV cut its forecast for 2013 production on Thursday, saying it now expected this to fall due to output problems in countries including Libya and Yemen, where security issues hurt third-quarter profits.

OMV, which had previously expected broadly similar production this year, now said it would be “somewhat below” 2012 as security issues in Libya and Yemen were compounded by difficulties in New Zealand and Austria.

The group posted third-quarter net profit down 17 percent to 263 million, below the lowest of analysts’ estimates in a Reuters poll.

It forecast production would rise again by 2014 to between 320,000 and 340,000 barrels of oil equivalent per day (boe/d) from an average of 291,000 in the first nine months of this year following its acquisition of offshore assets from Norway’s Statoil.

Shares in OMV fell more than 2 percent but by 0900 GMT had pared losses to trade down 1.6 percent at 36.67 euros, lagging an easier European oil and gas index. They were the biggest decliners in Austria’s benchmark ATX.

Rogue militias have disrupted oil exports for months in Libya, which is spinning out of control two years after dictator Muammar Gaddafi was toppled by rebels and NATO warplanes, making many foreign oil companies nervous.

OMV said its Libyan production was currently interrupted again while Yemen was currently producing. It said the situation remained hard to predict in both countries.

Tribesmen have repeatedly attacked oil pipelines in Yemen, which is battling one of the most active branches of al Qaeda.

OMV’s chief executive told Reuters last month the company was committed to Libya, which normally accounts for about 10 percent of its total production, despite the abandoning of projects there by some U.S. majors.

In New Zealand, an earlier-than-planned temporary shut-in of the Maari field would affect 2013 production, OMV said on Thursday, as would an influx of water in a key Austrian producing well.

“Refining margins, which experienced a high in 2012, are expected to remain at historically low levels for the rest of 2013 due to subdued demand and persisting overcapacity on European markets,” it added.

NO GAZPROM DEAL YET

OMV is investing heavily in exploration and production and reducing its refining and filling-station operations, which account for 16 percent of operating profit.

The company hopes the Statoil deal, together with a big Black Sea find, will help to balance its more volatile operations in north Africa.

OMV said it had not yet finalised the renegotiation of a long-term gas supply contract with Russia’s Gazprom, whose terms are weighing on its loss-making Gas and Power unit.

It had said it aimed to do so by the end of the year but CEO Roiss told journalists on Thursday he could not comment on any date, although he did still expect a result.

OMV did agree an adjustment to the terms of its supply contract with Statoil at the beginning of October.

Analyst Oleg Gaibur of Raiffeisen Centrobank said he was disappointed with the lack of news on either the Gazprom deal or a planned divestment of OMV’s stake in Germany’s Bayernoil refinery, but there were few other negative surprises.

“The results are rather neutral in my opinion,” he wrote in an email.

Clean CCS EBIT (earnings before interest and tax at current cost of supply) fell 21 percent to 619 million euros ($837 million), missing the average estimate of 647 million in a Reuters poll.

Clean CCS net profit dropped 17 percent to 263 million euros, below the lowest of the estimates in the poll, which averaged 304 million euros.

OMV reported last month that its third-quarter refining margin more than halved on weaker spreads and higher crude prices, while production slipped due to security problems in Libya and Yemen. ($1 = 0.7392 euros) (Reporting by Georgina Prodhan; Editing by Sophie Walker)

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