Romanian oil and gas company OMV Petrom posted a net income of  EUR 199 million in the first quarter of the year, up 5 percent on the same period of last year. Its earnings before interest and taxes (EBIT) stood at EUR 282 million, an increase of 26 percent compared to the first quarter of 2010, the company has announced in a report to the Bucharest Stock Exchange. The company's sales during this first quarter of 2011 totaled EUR 1.17 billion, a growth of 27 percent compared to the first quarter of last year. At the end of the first quarter, OMV Petrom had 24,300 employees, down 3,300 employees on the figure reported at the end of Q1 in 2010.

"During Q1/11, we continued to benefit from the favorable crude price environment and the effects of previously implemented cost savings measures. We decided to permanently close the Arpechim refinery, as the sale option we investigated in the past did not prove feasible,” said Mariana Gheorghe, the company's CEO.

“In exploration and production, for the first time since privatization, we managed to increase our quarterly daily production rates thanks to higher gas production in Romania and increased hydrocarbon volumes in Kazakhstan. In retail and marketing, our operational performance was impacted by the high crude price environment and the persisting subdued demand which put pressure on volumes and margins,” Gheorghe went on.

The outlook for 2011 includes expectations on a gradually recession exit for the country. OMV Petrom's focus will be to largely offset natural decline and to unlock potential, according to the company. The retail and marketing division will pursue operational optimization and the Petrobrazi modernization.

OMV Petrom is majority owned by Austrian oil and gas company OMV. The state will sell 9.84 percent in OMV Petrom on the Bucharest Stock Exchange towards the end of May, but OMV, which already owns 51 percent of the company, chose not to buy additional shares as increasing its stake would not change the level of influence in decision making, according to the company. Romania plans to reduce its stake in Petrom to 10.8 percent from the current 20.6 percent in a deal estimated at EUR 510 million, the highest transaction ever on the Bucharest Stock Exchange.

editor@romania-insider.com