August 13, 2008
OMV Profitability Surges As Pohokura Enters Full Output
By WEIR, James
OMV FACTSOMV NZ RESULTS
* Earnings last year: $95.4m, up 147%
* Turnover last year: $295.2m, up 130%
OMV NZ INTERESTS:
* 26% of Pohokura oil and gasfield.
* 10% of Maui gasfield.
* 69% of Maari oilfield, due to start production late 2008.
* 36% stake in exploration in the Great South Basin, south of the South Island.
* Austria's largest listed industrial company.
* Leading oil and gas group in Central Europe.
* Active in 20 nations.
Austrian-based international oil and gas company OMV more than doubled profits to $95 million in New Zealand last year, as the Pohokura field came into full production.
The $56.8m leap in OMV's profits, disclosed in Companies Office documents, is indicative of Pohokura's profitability with production starting in 2006, but increasing massively in 2007.
Industry watchers say the Pohokura field off the Taranaki coast north of New Plymouth is the unsung hero of the New Zealand oil and gas sector.
It is "enormously profitable" for its partners, with gas prices struck a few years ago when prices were at a peak, the source said. Pohokura produced about 70 petajoules of gas last year.
OMV holds just more than a quarter of Pohokura (26 per cent) with the balance held by New Zealand's Todd Energy with 26% and international oil giant Shell with 48%.
"It will be a very profitable field, you just don't hear about it because they (the partners) are not listed here," the industry source said. However, the oil business was risky and expensive so investors had to "make hay when they get a good one".
Asked how much the company paid in royalties to the Crown, OMV managing director in New Zealand Steve Hounsell said: "Too much, it is a lot of dough".
He could not give a specific figure but said it was 5% of revenues or 40% of accounting profits.
The most recent data show the whole industry paid $135m in royalties to the Government in 2006, but with rising oil and gas prices and a big jump in production the royalties are believed to now run into the hundreds of millions.
OMV is frustrated by bad weather delays in getting a drilling rig to its next field, Maari.
The 50m barrel Maari oilfield had been expected to start producing in the third quarter.
But it is looking more like the last quarter, with OMV revenues and and profits likely to jump significantly next year.
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