German oil and gas firm Wintershall has broken through the billion-Euro profit barrier, and is looking to expand its upstream activities dramatically in the Middle East.
Post-tax profit of the BASF subsidiary rose by 15 percent to 1.1 billion euros (2010: 0.9). Owing to the lower contribution from Libya, however, EBIT (earnings before interest and tax) fell by 10 percent to 2.1 billion euros (2010: 2.3).
“Our result for the year shows that with our company’s focus on core regions combined with partnerships and technologies, we are on the right track,” Rainer Seele, Chairman of the Board of Executive Di-rectors at Wintershall, explained at the company’s Annual Press Conference in Kassel.
Wintershall intends to step up its activities in the Arab region significantly.
“In Europe we must learn to position ourselves better in the major production regions of the world,” Seele said. “That also means expanding existing partnerships.”
As well as increasing production in Libya, the company also wants to develop new natural gas reserves off the coast of Qatar and in the United Arab Emirates.
“The Arab region beyond North Africa has so far been virtually off the map for German oil and gas companies. Yet the Gulf States are dominant on the global market in terms of reserves,” the Wintershall CEO explained to journalists in Kassel. Hence, German companies had to strengthen their presence in the region, he said. “We have the know-how and the technology to present ourselves as an attractive partner there,” Seele explained.
In 2010 Wintershall already opened a branch office in Abu Dhabi, one of the most important centers of the oil and gas industry in the Gulf region, the first German E&P company to do so.
“Wintershall’s activities in Libya are a prime example of our commitment to North Africa and the Middle East,” Seele continued. Production operations on land were suspended in February 2011 and offshore in March 2011 as a result of the unrest. They were re-started in September and October last year.
“Together with our Libyan staff last year we overcame the uncertainties. We secured, maintained and kept our facilities in Libya in good working order and were able to return there more quickly than others as soon as circumstances allowed us to. Thanks to the efforts of our colleagues there, we were able to restart production in concessions 96 and 97 in the desert quickly,” Seele emphasized.
At the end of 2011 the average daily production rate onshore was already 60,000 barrels per day. “We are aiming to reach maximum capacity utilization again as quickly as possible,” Seele explained.
In 2012 Libyan production is expected to rise again, partly as a result of the situation in Libya becoming more stable again. For 2012 Wintershall expects its production volumes to rise as a result of the situation in Libya stabilizing, and thus anticipates a significant improvement in sales and earnings in the exploration & production segment.
