Business review

Oil & Gas

In the Oil & Gas segment, sales to third parties grew by €369 million compared with 2013 to €15,145 million (volumes 14%, prices/currencies −13%, portfolio 1%). This was predominantly the result of higher volumes in the natural gas trading business. Income from operations before special items fell by €61 million to €1,795 million as a consequence of slightly smaller contributions from both business sectors. Special charges of €239 million mainly arose from valuation allowances on exploration and production projects, and were only partly offset by special income from the sale of shares in oil and gas fields in the British North Sea to the MOL Group. Income from operations therefore decreased by €715 million to €1,688 million. Net income declined by €266 million to €1,464 million.

Oil & Gas – Sales by region (Location of customer)
Oil & Gas – Sales by region (pie chart)

Our planning for 2015 is based on an average oil price between $60 and $70 per barrel and a U.S. dollar exchange rate of $1.20 per euro. On average, gas prices are likely to remain at 2014 levels. Because of the lower price of oil, we anticipate a slight decrease in sales and considerably reduced income from operations before special items in 2015. In the Exploration & Production business sector, the negative effects of the drop in oil prices will probably be partly offset by the expansion of our activities in Norway and the boost in Achimgaz production in Russia. We also expect to partially resume our onshore production in Libya. Our portfolio optimization measures will continue. For the Natural Gas Trading business sector, we anticipate considerable earnings improvement thanks to a higher contribution from the transportation business as well as rising sales volumes.

Segment data1 (in million €)

 

 

 

2014

20132

Change in %

1

Supplementary information on the Oil & Gas segment

2

Figures for 2013 have been adjusted to reflect the dissolution of the natural gas trading business disposal group.

3

In 2013, special income of €429 million had arisen from the reclassification of GASCADE Gastransport GmbH due to loss of control.

4

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

 

 

15,145

14,776

2

Thereof Exploration & Production

 

 

2,938

2,929

0

Natural Gas Trading

 

 

12,207

11,847

3

Intersegmental transfers

 

 

907

1,160

(22)

Sales including intersegmental transfers

 

 

16,052

15,936

1

Income from operations before depreciation and amortization (EBITDA)

 

 

2,626

3,149

(17)

Thereof Exploration & Production

 

 

2,162

2,133

1

Natural Gas Trading3

 

 

464

1,016

(54)

EBITDA margin

 

%

17.3

21.3

Income from operations (EBIT) before special items

 

 

1,795

1,856

(3)

Thereof Exploration & Production

 

 

1,412

1,450

(3)

Natural Gas Trading

 

 

383

406

(6)

Income from operations (EBIT)

 

 

1,688

2,403

(30)

Thereof Exploration & Production

 

 

1,305

1,569

(17)

Natural Gas Trading3

 

 

383

834

(54)

Income from operations (EBIT) after cost of capital3

 

 

369

1,179

(69)

Assets

 

 

13,686

11,855

15

Thereof Exploration & Production

 

 

9,476

7,731

23

Natural Gas Trading

 

 

4,210

4,124

2

Research expenses

 

 

50

67

(25)

Exploration expenses

 

 

132

194

(32)

Additions to property, plant and equipment and intangible assets

 

 

3,162

3,167

0

Net income4

 

 

1,464

1,730

(15)