OMV Petrom revises mid and long-term price assumptions

OMV Petrom, the largest energy company in Southeastern Europe, has revised its planning assumptions to reflect changes in the market environment. In Upstream, the long-term Brent oil price assumptions are now reduced to USD 60/bbl, compared to USD 75/bbl applied before. The updated oil price assumptions are expected to result in non-cash net impairments of around RON 800 million after tax, which include both write-offs of exploration intangibles and net impairments for tangible assets, a release shows.

The detailed Brent oil price assumptions are as follows:

For 2021, the company expects a continued macroeconomic impact of the COVID-19 pandemic and confirms its oil price forecast of USD 50/bbl;

The oil price expectation for 2022 and 2023 are reduced to USD 60/bbl from USD 70/bbl and USD 75/bbl, respectively;

For the years 2024 to 2029, OMV Petrom assumes a Brent oil price of USD 65/bbl (previously USD 75/bbl), which is expected to gradually decline to USD 60/bbl until 2035;

From 2035 onwards, OMV Petrom will use a Brent oil price of USD 60/bbl (previously USD 75/bbl);

All assumptions for the years 2025 onwards are based on 2025 real terms.

In Downstream Gas, the long-term power and CO2 price assumptions were revised taking into account the improved power generation market. This led to the full reversal of impairments for Brazi gas-fired power plant, amounting to around RON 450 million after tax. The above changes in the planned commodity prices are expected to result in net impairment charges amounting to around RON 350 million after tax in Q3/20.

“Our integrated business model proves once again its benefits, especially in an expected lower oil price environment. We will continue to pursue our strategy execution, with the aim to supply energy in a sustainable and cleaner manner, with natural gas playing a significant role in the energy transition,” said Christina Verchere, CEO of OMV Petrom.