Wintershall is on a growth course despite the difficult conditions in the industry and attained an historic level of production in 2016 of 165 million barrels of oil equivalent (BOE) the firm said at its annual press conference held in Germany.
The German oil and gas company that is part of BASF announced that it has increased its oil and gas production in the last ten years by around 50 per cent. At the same time, Wintershall more than doubled its commercially recoverable oil and gas reserves in the same period from 814 million BOE to 1.62 billion BOE.
“Solid foundations for further profitable growth in future too,” CEO Mario Mehren said at the company’s annual press conference and announced that the company would continue on its long-term growth course. In 2017 Wintershall expects a significant rise in sales and EBIT before special items.
“This is because we made the right investments early: in oil and gas fields in regions with low production costs and in expanding our strong partnerships,” Mehren explained, adding that the focus in 2017 will primarily be on improving the company’s results.
The company had raised its production to a new record high and at the same time reduced costs and investment expenditure, it said. “We adapted successfully to the new business climate,” Mehren said, and continued: “The results, especially our continued positive free cash flow, show that the measures we have taken are working.”
He added: “Thanks to cost optimization and the asset swap with Gazprom, we were able to reduce investments on the previous year by around 700 million euros.”
“Despite the low oil and gas prices, once again we proved in a challenging year that we are competitive and robust. In a difficult environment we performed very well,” the Wintershall CEO said.
Furthermore, the company was able to further increase oil and gas production in 2016 by 12 million BOE to 165 million BOE (2015: 153 million BOE), which equals growth of almost 8 percent.
The much higher production volumes in 2016 came primarily from Norway and the Achimgaz joint venture in Russia. In Libya Wintershall was only able to produce again in onshore concession 96 from 16 September 2016 owing to the difficult political conditions, and it resumed production at a low level of 35,000 BOE per day.
Wintershall said it intends to continue building on selected projects, especially in low-cost production regions such as Argentina and Russia, but also in Norway. Overall Wintershall plans to invest some 4.4 billion euros in stepping up its oil and gas activities by 2021.
“Our planning for the year 2017 is based on an average oil price for Brent of 55 US dollars/barrel,” Mehren said.