BASF sees Libyan oil underpinning profit
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BASF sees Libyan oil underpinning profit

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BASF stuck to its outlook of higher operating earnings this year, predicting that the resumption of its oil production in Libya would help to offset a likely decline in profit at its core chemicals business.

The world’s largest chemicals maker by sales, whose products range from catalytic converters and car coatings to insulation foams, said it was suffering as a result of a slowdown in China, its main growth market, and a slight decline in sales and volumes in debt-laden Europe.

Before last year’s armed conflict in Libya, BASF’s oil and gas unit was the second-largest foreign oil company in the North African country after Italy’s ENI.

After some setbacks in ramping up production there in the first quarter, BASF managed to continuously produce crude oil in Libya throughout the second quarter, it said.

Output is now at 80,000 barrels per day, and only bottlenecks in the country’s pipeline infrastructure are keeping BASF from churning out its maximum capacity of 100,000 barrels.

The group also said it still expected group sales to rise this year even as sales volumes in most of its chemicals and plastics businesses declined in the second quarter.

BASF’s earnings before interest and tax (EBIT), adjusted for one-off items, rose by more than 11 percent to 2.5 billion euros ($3.03 billion), surpassing the 2.3 billion euro average estimate in a Reuters poll of analysts.

U.S. peer DuPont said this week it expected 2012 earnings to come in at the bottom of its prior forecast range, due in part to economic uncertainty around the globe.

(Reuters)