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Wintershall Dea reports Q3 income jump, seeks looser ties with Russia

Oil slides after IMF says slowing global growth engines portend tougher 2023
Oil slides after IMF says slowing global growth engines portend tougher 2023 Copyright Thomson Reuters 2023
Copyright Thomson Reuters 2023
By Reuters
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By Vera Eckert

FRANKFURT -Oil and gas producer Wintershall Dea said on Tuesday that its most closely watched measure of earnings more than doubled in the third quarter of 2022 and that it would seek to strengthen business in locations outside Russia.

Wintershall Dea was looking into whether the international business it is pursuing could be legally separated from its Russian activities, said Chief Executive Mario Mehren.

"Russia's war and its consequences are destroying the foundations of economic relations, as Russia has become unpredictable in every respect," he said.

He said the company brought the Norwegian Nova project successfully on stream in July and was expanding business in Mexico and Argentina.

Wintershall Dea, a long-term partner to Russian gas giant Gazprom, reported earnings before interest, tax, depreciation, amortisation and exploration expenses (EBITDAX) - a standard oil industry measure - jumped 162% to 2.6 billion euros ($2.57 billion) in the three months to end September from a year earlier.

The company cited strong oil prices [O/R] and robust operational performance.

News arrived overnight of a deal that the company has bought a 37% participation in the Hokchi block offshore the coast of Mexico, as a forerunner of long-term growth there.

Mehren also referred to a recent $700 million investment in the Argentinian Fenix gas development.

The company, owned jointly by BASF and investor group LetterOne, will put recommendations for a delayed 2021 dividend to shareholders next month and distribute the money by year-end, CFO Paul Smith told analysts.

There were 4.2 billion euros available on the balance sheet for the purpose, minus 2 billion euros of cash trapped in Russia from income related to Wintershall Dea's three joint ventures there, he said.

A dividend decision for 2022 would be processed at the end of the first quarter.

Asked about what the company intended to do about the inaccessible money in Russia, Mehren said it was determined to recover it. "The money belongs to us contractually and therefore, we'll go after it," he said.

BASF shares were down 2% at 1320 GMT.

($1 = 1.0129 euros)

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