Oil & Gas

2nd Quarter 2016

• Considerable decline in sales and earnings due to lack of contributions from gas trading and storage business as well as lower oil and gas prices

In the Oil & Gas segment, sales dropped considerably compared with the same quarter of the previous year (volumes 2%, prices/currencies –3%, portfolio –82%). As a result of the asset swap completed with Gazprom at the end of September 2015, the segment ceased receiving contributions in particular from the natural gas trading and storage business as of the fourth quarter of 2015. This business had contributed €3.0 billion to sales in the second quarter of 2015. In the continuing oil and gas business, volumes grew by 9% year-on-year, whereas price and currency effects came out to minus 18%. The price of a barrel of Brent blend crude oil in the second quarter of 2016 was $46 on average (second quarter of 2015: $62 per barrel). Gas prices on European spot markets also fell sharply compared with the previous second quarter. We were able to ramp up production volumes, especially in Norway.

Income from operations before special items declined considerably, as well. Falling prices were the main reason for this, along with the divestiture of our gas trading and storage business to Gazprom. An additional factor was, as expected, the reduced earnings contribution from our share in the Yuzhno Russkoye natural gas field. Net income decreased significantly.