By Jan Hromadko
(Adds profit forecast, details.)
FRANKFURT (MarketWatch) -- German natural gas and crude oil company Wintershall AG Wednesday raised its production targets for 2010 saying that it will reach its previous goal of 120 million barrels of oil equivalent two years early.
The wholly-owned unit of chemicals company BASF SE (BAS.XE) said its target is now 140 million barrels of oil equivalent in 2010.
Wintershall also said it expects 2008 earnings before interest and taxes to come in at least at last year's level of EUR3.01 billion, despite rising operating costs.
Chief Executive Reinier Zwitserloot also told reporters at the company's annual press conference that Wintershall expects crude oil prices to remain high "but below $100 a barrel."
"For 2008 we expect a substantial increase of our natural gas production due to (production at the western Siberian gas field) Yuzhno-Russkoye," Zwitserloot said.
Wintershall owns 25% minus one share in the giant Russian gas field, which it is developing with Russian natural gas monopoly OAO Gazprom . Yuzhno-Russkoye has gas reserves of more than 600 billion cubic meters, or BCM. Zwitserloot also said that the Yuzhno-Russkoye gas field will reach plateau production of 25 bcm in in 2009, two years earlier than originally planned. Production of the gas field began in October 2007 and currently stands at 35 million cubic meters a day, he added.
Zwitersloot forecast that Yuzhno-Russkoye will contribute positively to Wintershall's earnings in 2008, the first full year of production, despite considerable start-up costs.
Zwitserloot said that the increased gas production in 2008 will offset declining production of crude oil. Overall, the company is targeting a production volume of 120 million barrels of oil equivalent, he added.
In 2007, Wintershall produced 112 million barrels of oil equivalent, the company said.
Wintershall also said it expects to reach its 2010 target for gas sales two years early. "Even though we have had another warm winter we intend to reach our 2010 goal of 40 BCM in gas sales in the current year," Zwitersloot said.
Company Web site: http://www.wintershall.com