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OMV expects refining margins to trend downwards

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Hydrocarbon Engineering,

In its group report for 1Q17, OMV has reported the refining margins are projected to be on a similar level compared to 2016.

In 1Q17, the company generated €805 million in operating results, supported by a strong contribution from both upstream and downstream.

Following a strong performance in the first quarter, the company expects refining margins to trend downwards for the rest of 2017 due to persisting overcapacity in the market.

OMV also confirmed that a full-site turnaround at the Schwechat refinery started in mid-April 2017. Investments and operating costs related to the turnaround, which is expected to last approximately six weeks, will amount to €110 million and €23 million, respectively. Capacity utilisation in 2017 is expected to be above 90% despite the planned turnaround.

The company expects petrochemical margins to be higher compared to the levels in 2016.

OMV also confirmed that it expects to close the divestment of its wholly owned subsidiary, OMV Petrol Ofisi, to the Vitol Group in 3Q17 at the latest.

Natural gas sales volumes are expected to be slightly higher in 2017 compared to 2016, while natural gas sales margins are expected to be slightly lower due to the oversupply in the European gas market.

Rainer Seele, CEO and Chairman of the OMV Executive Board, said: “OMV had a successful start to 2017 with very good operational and financial performance […] In Downstream, we captured the benefits of a strong market environment along the entire value chain. The refinery utilisation rate reached a high of 96%, and the OMV indicator refining margin remained strong at US$5.4/bbl. The petrochemical business and Borealis strongly contributed to this favourable result.”

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