UPDATE 1-Romania's OMV Petrom Q2 profit falls, sharply below forecast

Tue Aug 12, 2014 6:09am GMT
 

* New Romanian property tax bites

* Exploration expenditures treble from pvs quarter (Adds CEO comments, context)

BUCHAREST Aug 12 (Reuters) - Romania's top oil and gas company OMV Petrom, controlled by Austria's OMV posted a second-quarter net profit of 311 million lei ($94 million), down 70 percent on the year and sharply below forecast due to higher taxes.

Petrom was seen posting a 40 percent fall in its second-quarter net profit to 638.8 million lei partly due to a new tax on property, according to a Reuters poll of four banks and brokerages.

The country's biggest company recorded a net profit of 1.06 billion lei in the same period of 2013.

"The weak demand in oil and gas downstream, coupled with additional taxation introduced in 2013-2014, almost offset the benefits from gas price liberalisation," said Mariana Gheorghe, Petrom's chief executive.

The tax, which was approved by the leftist government late last year and has been widely criticised by businesses, slaps a 1.5 percent charge on the value of special buildings owned by companies, from oil wells to warehouses to electricity poles.

Gheorghe added that given the long cycle of Petrom's investments and "assuming an investment-friendly fiscal and regulatory environment going forward," the company will continue to implement its projects, particularly focusing on field redevelopment projects and exploration - onshore and offshore.

OMV Petrom's exploration expenditures in the second quarter increased to 329 million lei from 99 million lei in January-March, amid the "mobilisation of the Ocean Endeavor deep offshore drilling rig for Domino-2 and successful drilling of Marina-1 well in the shallow Black Sea."

($1 = 3.3200 Romanian lei) (Reporting by Radu Marinas)

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