* Eyes lower investment, spend after heavy earnings drop
* Seeks to raise production in low-cost regions
* Committed to Nord Stream-2 pipeline despite concern
By Vera Eckert
KASSEL, Germany, April 7 (Reuters) - BASF’s Wintershall oil and gas subsidiary plans to cut costs and trim investments in response to sharp oil price falls that forced it to lower its sales and earnings forecasts for 2016.
The international exploration business will seek to cut costs by at least 200 million euros ($228 million) after its net profit fell 28 percent to 1.05 billion euros last year.
Wintershall could seek further savings in operational costs should oil prices stay low, finance chief Ties Tiessen told journalists.
“There is still room on the upside there,” he said.
Last year, oil prices slumped 47 percent to $52 a barrel on average for North Sea grade Brent when Wintershall had operated on the assumption of a range between $60 and $70.
Wintershall’s planning is based on an average $40 this year.
Lower results last year were also due to the disposal of trading assets to Russian partner firm Gazprom.
Wintershall also continues to encounter problems linked to unrest in Libya where its oil output is only a third of the possible maximum.
The company announced a 600 million euros writedown on its assets in January.
Chief Executive Mario Mehren said production would be expanded in lower-cost regions such as Russia and Argentina.
“Wintershall will do both in coming years, save and invest. Those goals are not contradictory,” he told the news conference.
Investments in 2016 will fall by 28 percent to 1 billion euros, especially at projects in the Norwegian and Dutch North Sea that are not far developed as yet, he said.
The company is set to spend 4.8 billion euros over the next five years, especially in Russia and Argentina, where its cost structure is far below industry averages.
The company is also active in Norway and Abu Dhabi and eyes upcoming opportunities in Iran.
Wintershall accounted for more than a fifth of EBIT at parent group BASF in 2015, which had reported results on Feb 26.
BASF shares were 0.9 percent down compared with the steady main Dax index.
Mehren brushed off concerns over overreliance on Gazprom in the Nord Stream-2 project, where Wintershall is partner in an international consortium planning to double existing pipeline transport by opening new subsea capacity to the EU by 2019.
“The safest transit country is the Baltic Sea,” he said, alluding to problems with transit via Ukraine following Russia’s annexation of the Crimea region.
$1 = 0.8790 euros Reporting by Vera Eckert; Editing by Christoph Steitz and Keith Weir