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Wintershall with record production
21 March 2019 , 15:49Neftegaz.RU1251
Kassel, March 21 - Neftegaz.RU. Production of 171 million barrels of oil equivalent significantly exceeds previous level.
Wintershall reported this on March 21, 2019.
Wintershall is looking back in 2019 not only on 125 years of company history, but also on a successful past business year.
"In 2018 we set a production record with daily production of up to 500,000 barrels of oil equivalent (BOE). With a crude oil and natural gas production of 171 million BOE in 2018, Wintershall has once again significantly surpassed the record figure - 164 million BOE - from the previous year," explained CEO Mario Mehren at the Annual Press Conference for Wintershall, Germany's largest internationally active crude oil and natural gas producer.
Wintershall also increased its reserves by 12 percent to 1.9 billion BOE - also a record figure.
Wintershall replenished 214 percent of the volumes produced in 2018.
The reserves-to-production ratio was increased to around eleven years.
This is the ratio of Wintershall's production in 2018 to the end-of-year reserves.
Future-oriented gas and oil production
Despite the continued challenging market environment in 2018, Wintershall increased its income from operations before special items (EBIT) by 155 percent, from 683 million euros in 2017 to 1,745 million euros.
This was primarily due to higher gas and oil prices and higher production volumes in Norway and Russia.
EBIT increased by 798 million euros to 1,733 million euros.
This is a plus of 85 percent.
BASF's net income after taxes increased by 69 million euros (plus 9 percent) to 829 million euros (2017: 760 million euros).
Sales to third parties increased by 842 million euros over the previous year to 4,094 million euros (2017: 3,252 million euros) due to higher prices and volumes.
This is a 26 percent increase.
The average price for a barrel of Brent crude in 2018 was 71 US dollars (2017: 54 US dollars).
Gas prices on the European spot markets rose by around 32 percent over the previous year.
The merger with DEA sets the course for further growth.
The new company is aiming to increase Wintershall DEA's average daily production, which together for the two companies is currently around 590,000 BOE, by around 40 percent to between 750,000 and 800,000 BOE within the next four years.
This growth is expected to come from both the existing portfolio of the two companies and the new production regions.
DEA has recently become active in Mexico, and Wintershall has succeeded in entering a new oil and gas concession in Abu Dhabi.
Russia: Expansion of projects
The production in Russia and the further field developments in Western Siberia are making a significant contribution to the planned increase in production.
The drilling campaign in Block 1 A of the Achimov Formation in the Urengoy field, in which Wintershall has a 50 percent interest, is set to be completed by the end of 2019.
In the future the joint venture with Gazprom will produce around 8 billion cubic meters of natural gas per year from up to 110 wells.
The development of blocks 4 A and 5 A in the Achimov Formation, in which Wintershall has a 25 percent interest, is proceeding according to plan.
Gazprom estimates that 15.5 billion cubic meters of natural gas will be produced here by Wintershall and Gazprom at plateau level.
Wintershall also has a 35 percent stake in the commercial success of the Yuzhno Russkoye natural gas field in Western Siberia, which has been producing 25 billion cubic meters of natural gas per year since the middle of 2009.
The successful development of the Turonian layer is expected to maintain the high production level to at least 2022, according to estimates from Severneftegazprom.
Volgodeminoil, Wintershall's joint venture with Lukoil's RITEK subsidiary in southern Russia, is the longest existing joint venture between a Russian company and a foreign partner and is regarded as a pioneer of German-Russian oil production.
Even after more than 25 years the cooperation still exemplifies successful bilateral collaboration and joint economic success.
Last year the company reached a new milestone with a total production volume of 10 million tons of oil.
"In 2018 we once again increased production in our Russian projects," said Mario Mehren."We also want to continue this course after the planned merger and invest in expanding our projects in Russia, which is - and remains - our most important core region," Mehren explained.
Nord Stream 2: Infrastructure for Europe - safe, cost-effective, environmentally friendly
For affordable climate protection and a competitive industry in Europe, it is essential that natural gas is delivered to Europe reliably, cost-effectively and in a climate-friendly manner.
The Nord Stream Baltic Sea pipeline, which is being expanded with Nord Stream 2 due to the growing demand for energy and the decline in production in the EU, will contribute to this.
The capacities of Nord Stream 1 were fully utilized in 2018.
"Nord Stream 2 offers up to 55 billion additional cubic meters of natural gas for the European markets.Arithmetically speaking this could replace, for example, Germany's entire coal-fired power generation," said Mehren.
Wintershall is helping to finance the Nord Stream 2 project as a lender and will provide up to 950 million euros for the project.
By December 31, 2018, almost two thirds of this amount had been released.
To date, the Nord Stream 2 AG project company has received approval for the construction and operation of the pipeline system from all neighboring states except Denmark. Over 800 kilometers of pipes have already been laid.
Outlook for 2019
In 2019, delivering the merger with DEA will be the decisive issue for Wintershall.
Wintershall will also be investing in the expansion of gas and oil production, particularly in Russia, Norway and the Middle East.
A key project in Norway will be Nova, while in Russia plans are underway to prepare plateau production in Block 1 A of the Achimov Formation.
The extensive infrastructure and construction work for developing blocks 4 A and 5 A in the Achimov Formation is proceeding according to plan.
In addition, Wintershall will begin developing its local operations in Brazil.
The production in Europe will continue to focus on increasing efficiency and effectiveness, but it is also planned to step up the exploration activities again.
"Our plans for 2019 are based on an average Brent crude oil price of 70 US dollars per barrel and an exchange rate of 1.15 US dollars per euro," said Mehren.
To read this news in Russian.
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