Germany’s oil and gas producer Wintershall Dea has reported record revenues in the second quarter of this year as a gas trading segment of its business reported continued rapid growth.
According to the company’s latest financial report, revenues in the second quarter rose to almost €4.2 billion (US$4.3 billion) against €3.9 billion in the first quarter of 2022 and €1.5 billion in the second quarter of 2021.
Its gas trading business contributed almost €2.2 billion to the top line in the second quarter, increasing slightly compared to results in the first quarter, but achieving fivefold growth versus the same period last year.
Wintershall Dea’s general and administrative expenses more than doubled to top €1.5 billion in the second quarter against the previous three months. However, other major expense lines posted declines between April and June compared to the first quarter of 2022 which permitted the company to report net income, attributable to shareholders, at €658 million against a loss of €1 billion in the first quarter of 2021.
The net income figure for the second quarter this year turned out to be higher than the bottom line for the whole of 2021 when the company reported net income of €553 million.
The growth in both top and bottom lines came despite Wintershall Dea being unable to repatriate its share of earnings from its three gas producing ventures in West Siberia in Russia where the country’s gas giant Gazprom is its partner.
Wintershall Dea chief executive Mario Mehren said on Tuesday that dividend payments from the three ventures to company accounts outside Russia will require special permission from the country’s Finance Ministry.
“We are in a trap here,” he said, adding the company does not expect to see those payments from Russia anytime soon.
However, there are no plans for the company to sell and exit its holdings in these ventures. According to Mehren, the ventures have been operating without failure despite several rounds of international sanctions that have been imposed on Russia since February 2022 in response to its military invasion of Ukraine.
It would be “a big gift for Russians if we simply walk away”, Mehren said.
The first venture with Gazprom is developing the South Russkoye gas field in which Wintershall Dea owns a 35% interest.
The company is also a shareholder in two ventures with Gazprom that target highly pressurised deep Achimov gas and condensate formations within the Gazprom-owned legacy fields, Achimgaz and Achim.
Mehren said that as no new investment flows into Russian upstream projects, the company has quickly positioned its strategy to invest in the Norwegian North Sea and Algeria.
In Norway, the company is planning three production launches later this year at the Nova, Dvalin and Njord projects.
“We aim to produce up to an additional 80,000 barrels of oil equivalent per day, more than half of which will be urgently needed gas,” Mehren said.
Wintershall Dea is also analysing all options to increase production from its German fields as quickly as possible, he added.
“We must wisely and responsibly play the trump cards that we have been holding for a long time by producing as much natural gas – as well as oil – as possible right here in Germany,” he said.
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