Moscow — Russia’s largest oil producer Rosneft made a second-quarter profit of 43 billion roubles after reporting a loss in the previous three months thanks to a rise in oil prices, it said on Friday.
Rosneft, headed by Igor Sechin, a long-standing ally of President Vladimir Putin, is the first big Russian oil company to report financial results for the second quarter, when oil prices started to rebound after hitting a 21-year low in April.
The oil market, under pressure from overproduction and the fallout from the coronavirus crisis, has been on a recovery path thanks to a global deal between OPEC and other leading oil producers, including Russia, to cut oil production.
The company, which accounts for more than 40% of Russia’s total oil output, said it produced 4.04 million barrels of oil per day (bpd) in the second quarter, down 13% from the previous quarter, due to the global output reduction deal.
Didier Casimiro, Rosneft’s first vice president, told investors on a call that the company had increased daily oil production in early August by around 6% from July, in line with the easing of output curbs by the OPEC+ group.
Rosneft expects the company’s, and Russia’s overall, oil production to remain stable in August-December.
A company official also said Rosneft’s capital expenditure may increase to 1 trillion roubles in 2021 from a downwardly revised 750 billion roubles in 2020.
BACK TO PROFIT
Rosneft gave a dollar figure of $700 million for its April-June earnings, saying the conversion was calculated using average monthly Central Bank of Russia exchange rates for the reporting period.
The company, in which BP owns a 19.75% stake, sustained a loss of 156 billion roubles ($2.13 billion) in the first quarter, when the oil price fell by two-thirds.
“As prices for crude oil and refined products had improved, our financial metrics demonstrated a positive dynamic in the course of 2Q 2020. This provides us confidence that the company’s financial results will stage a recovery in the upcoming periods,” Sechin said in a statement.
In the second quarter of 2019, Rosneft had reported a net profit of 194 billion roubles.