KASSEL, Germany, April 7 (UPI) -- German oil and gas company Wintershall said Thursday it was expecting a steep decline in sales this year as crude oil prices linger at around $40 per barrel.
Mario Mehren, board chairman for the company, said Wintershall was charting a path forward based on the expectation that the price for Brent crude oil would stay around $40 per barrel this year.
"We expect our production to be increased, but a significant fall in sales and [income from operations] before special items compared to 2015," he said in a statement.
Wintershall said its sales to third parties last year declined 14 percent from 2014 levels, though it attributed the bulk of that to a September 2015 asset swap with Russian energy company Gazprom. Income from operations declined as a result of the loss in sales to $1.5 billion, against $2 billion during full-year 2014.
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Wintershall last year sold its minority shares in four fields on the Norwegian shelf to Tellus Petroleum, which has headquarters in Oslo, for around $600 million. That followed a decision to close offices in Qatar, which holds the world's third largest deposits of natural gas, because of a lack of access to natural gas infrastructure.
Mehren said mixing up the portfolio for Wintershall provided it with some protection during the market downturn. Total oil and gas production, meanwhile, increased by 13 percent from 2014 to 153 million barrels of oil equivalent, which Mehren said helped make a positive contribution to earnings to parent company BASF Group.
The board chairman, however, said 2016 would continue as a challenging year even as crude oil prices recover from levels below $30 per barrel earlier this year.
"Volatility at low prices will continue in 2016," he said. "We cannot compensate for low oil and gas prices despite rising production."
