Austrian oil and gas group OMV's output could stagnate at 300,000 barrels of oil equivalent per day until 2020 if an asset swap with Gazprom for a stake in a Siberian field falls through this year, Chief Executive Rainer Seele said.
OMV is looking to Russia for low-cost production as its portfolio is burdened with expensive North Sea assets, which Seele's predecessor bought for $2.65 billion in 2013.
On February 18, OMV's management proposed a 1 euro per share dividend for 2015, down 20 percent from the previous two years, as it booked a net loss of 1.1 billion euros ($1.23 billion) in the full year.
OMV, which relies for much of its output on mature fields in Austria and Romania, must double the replacement rate of its production sites to 100 percent in the next four years, Seele said, at the same time as cutting spending.
"Our reserves are melting like snow in the sun," he said, listing Russia, Iran and the United Arab Emirates - home to OMV's second-biggest shareholder IPIC - as low-cost destinations over the mid term.
"For me volume growth is secondary. The aim is to stay at 300,000 barrels a day until 2020. A 20 percent increase is nevertheless possible, if the (Gazprom asset swap) works and our stopped output from Libya and Yemen returns."
If all goes according to plan, a contract for an asset swap with Gazprom for a stake in Siberia's vast Urengoy oil and gas field, should be signed this year with production for OMV there reaching 50,000 boe/d by 2020, Seele said.
"The Russia project will be the biggest lever and have the biggest impact ... We don't have a plan B," Seele said, adding Gazprom had not yet told OMV which assets it is interested in.
Due diligence will still take several months, Seele said.
In 2015 most oil firms had major write downs in their upstream business, many slashing jobs. OMV booked impairments of around 3 billion euros, mainly because it had to reduce its oil price expectations twice in the second half of the year.
It aims to cut costs across all operations by 100 million euros this year, but Seele said there was no job cut target.
OMV's slumping profit in exploration and production was buffered by its downstream segment, including refining and marketing, whose adjusted operating profit doubled in 2015.
OMV will further cut its investments by 400 million euros ($446 million) to 2.4 billion euros this year, of which it will put 70 percent into its upstream business, down from 80 percent in 2015, as it will spend more on its downstream division.
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