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Last Update: 03/11/2010
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Business development

Exploration and production of oil and natural gas; Trading, transport and storage of natural gas

  • Significant decline in sales due to lower prices; earnings below previous year’s level
  • Oil price expected to stabilize in 2010 at a higher level than in 2009; our planning is based on the following annual average assumptions: oil price of $75 per barrel; euro/dollar exchange rate of $1.40 per euro
  • All construction permits for the Nord Stream pipeline have been granted
  • Construction started on the OPAL pipeline (Baltic Sea Pipeline Link)
  • Outlook 2010: improved earnings and nearly unchanged sales

Sales by division 

Oil & Gas – Sales by division (pie chart)

BASF’s oil and gas activities are bundled in the Wintershall Group. Wintershall and its subsidiaries operate in the business sectors Exploration & Production and Natural Gas Trading.

In 2009, sales to third parties decreased by €3,089 million to €11,356 million (volumes –4%, prices/currencies –18%, portfolio 1%). Income from operations fell by €1,555 million to €2,289 million. Net income declined by €239 million to €712 million.

Oil & Gas – Sales by region
(location of customer)

Oil & Gas – Sales by region (pie chart)

As a result of the development of the world economy, we expect the oil price in 2010 to stabilize at a high level in comparison with the average price in 2009. We have based our planning on an oil price of $75 per barrel and an average euro/dollar exchange rate of $1.40 per euro in 2010. We expect earnings to increase while sales remain nearly unchanged.

For more on the segment’s net income, see Notes to the Consolidated Financial Statements

Sales Oil & Gas
(million €)

Oil & Gas – Sales (bar chart)

Income from operations Oil & Gas
(million €)

Oil & Gas – Income from operations (bar chart)

Factors influencing sales Oil & Gas

Oil & Gas – Factors influencing sales (bar chart)
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Segment data Oil & Gas 1 (million €)

 

 

 

2009

2008

Change in %

1

Supplementary Information concerning Oil and Gas Producing Activities

2

In the Oil & Gas segment, non-compensable foreign income taxes for oil production are deducted.

3

Information on the net income of the Oil & Gas segment can be found in the reconciliation reporting Oil & Gas in the Notes to the Consolidated Financial Statements.

Sales to third parties

11,356

14,445

(21.4)

Thereof Exploration & Production

3,847

5,308

(27.5)

Natural Gas Trading

7,509

9,137

(17.8)

Intersegmental transfers

702

1,235

(43.2)

Sales including intersegmental transfers

12,058

15,680

(23.1)

Income from operations before depreciation and amortization (EBITDA)

2,830

4,409

(35.8)

Thereof Exploration & Production

2,188

3,744

(41.6)

Natural Gas Trading

642

665

(3.5)

EBITDA as a percentage of sales

24.9

30.5

Income from operations (EBIT) before special items

2,289

3,844

(40.5)

Thereof Exploration & Production

1,781

3,319

(46.3)

Natural Gas Trading

508

525

(3.2)

Income from operations (EBIT)

2,289

3,844

(40.5)

Thereof Exploration & Production

1,781

3,319

(46.3)

Natural Gas Trading

508

525

(3.2)

Income from operations (EBIT) after cost of capital 2

695

1,271

(45.3)

Assets

8,301

8,356

(0.7)

Thereof Exploration & Production

4,997

4,740

5.4

Natural Gas Trading

3,304

3,616

(8.6)

Exploration expenses

143

227

(37.0)

Additions to property, plant and equipment and intangible assets

1,012

1,651

(38.7)

Income taxes on oil-producing operations non-compensable with German corporate income tax

870

1,851

(53.0)

Net income 3

712

951

(25.1)

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