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OMV Libya oil output tumbles, shares follow

Vienna, February 23, 2011

Austrian oil and gas group OMV said it could be heading for a full production shutdown in Libya as it pulled staff out of the turmoil-hit country and its shares tumbled nearly 8 per cent.

The flagship of OMV's growing North Africa business, Libya provided OMV with 33,000 barrels of oil equivalent per day (boe/d) in 2010, around a tenth of the group's total output.

'We are evaluating the situation. We cannot say at the moment how production is developing exactly,' chief executive Wolfgang Ruttenstorfer told a news conference.

'It is going down sharply. We do not rule out that it could come to a complete stop for a period of time,' he said, adding that OMV would not be able to make up for the shortfall with production elsewhere.

He said he had no indications to support reports that Libyan strongman Muammar Gaddafi could cut off the flow of oil and gas.

OMV stock was down 6.9 per cent at 29.71 euros by 1058 GMT, the biggest decliner by far in the European sector index which slipped  0.7 per cent.

'We calculate that if this (a complete Libya stop) really happens it would have a negative impact of 1.61 euros per share,' one Vienna-based trader said.

'I think it is too early to speculate where Libya is going to go. Right now our priority is to get our people out. We are still in the process of getting the very last out of our people out,' exploration and production chief Jaap Huijskes said.

'Production is looking at significant decreases or a full stop. I think what happens after that remains to be seen.'

OMV had forecast steady production in 2011 when it released disappointing fourth-quarter results on Wednesday, but later made clear that did not reflect recent events in Libya.

OMV has 12 exploration and production licenses in the country and in 2008 it extended some of its petroleum contracts to 2032.

North Africa is a core growth area for OMV, which this month closed the purchase of Tunisian assets from Pioneer Natural Resources.-Reuters




Tags: Oil | Austria | OMV | crude production | gas group | Libya shutdown |

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