An unprecedented rise in spot gas prices in Europe this year gave Germany’s oil and gas producer Wintershall Dea a major earnings boost in the third quarter of 2021, more than offsetting the impact on revenues of production curtailments in Russia in the period.
According to the company’s consolidated financial statement, revenues from the gas trading segment of its business rose to €708 million ($821 million) in the third quarter, against €118 million in the same period of 2020 and €431 million in the second quarter of this year.
Overall oil and gas revenues increased 161% to €1.837 billion, up from €703 million in the third quarter of 2020.
The company posted a quarterly net profit of €204 million against the net profit of €45 million in the third quarter of 2020.
Rising operating expenses and higher income tax payments restrained this bottom line recovery, the results suggested.
Sales of Wintershall Dea-produced gas generated €517 million of revenues in the third quarter against €253 million a year earlier, the company showed.
Russian production hit
The surge in earnings was achieved despite a major fire at the Gazprom-operated condensate processing facility near the city of Novy Urengoy, which caused a 29% decline in Wintershall Dea’s net gas and condensate output from Russia.
The share of production of so-called “wet gas” by Wintershall Dea’s joint ventures with Gazprom in West Siberia dropped to 238,000 barrels of oil equivalent per day in the third quarter against 308,000 boepd in the second quarter of this year.
The fire that wiped a condensate processing train in the first half of August led to restrictions being imposed on production of wet gas with high condensate content from deep wells in West Siberia.
However, the decline in Russian production was partly compensated by higher gas output in northern Europe, where production averaged 216,000 boepd in the third quarter, compared with 180,000 boepd in the second quarter of 2020.
Wintershall Dea said that its total output of gas and liquids fell to 588,000 boepd in the reporting period against 613,000 bpd in the second quarter and 659,000 boepd in the first quarter of this year.
With restrictions on gas and condensate production now removed in Russia, Wintershall Dea is expecting to report full year output of between 615,000 and 630,000 boepd.
The company also said that it is moving forward in its commitment to reduce its carbon footprint from operations, with carbon capture and storage project Greensand in Denmark moving into a next phase, with first offshore CO2 injection planned by late 2022.
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