FSU OGM: Rosneft endures tough 2020

Russia’s biggest oil producer Rosneft suffered a near 80% drop in net profit in 2020, it reported on February 12, as the coronavirus (COVID-19) pandemic sapped fuel demand and caused prices to collapse.

The state-owned firm reported a RUB147bn ($2bn) net income for the year, versus RUB705mn in 2019. Beyond weaker prices, its oil and condensate production was cut by 11.1% to 4.11mn barrels per day (bpd), owing to Russia’s OPEC+ commitments. Rosneft’s 2020 revenues sank 33.6% to RUB5.76 trillion, while EBITDA was down 42.6% at RUB1.2 trillion.

Rosneft’s numbers were stronger in the fourth quarter, with the company returning to a net profit of RUB324bn, after booking a RUB64bn loss in the previous three months. Its net income in the final quarter of 2019 was RUB158bn. EBITDA was more or less unchanged quarter on quarter at RUB364bn, but was down 25% year on year.

On the operational front, Rosneft plans to launch production from one of its flagship domestic gas projects in the next few days, the state oil firm’s vice-president for domestic services, Eric Liron, said on February 12.

Rosneft subsidiary Rospan has rights to the East-Urengoysky, Novo-Urengoysky and Resursny areas in the Yamalo-Nenets region of Western Siberia. Production reached nearly 6.7bn cubic metres in 2019, but Rosneft plans to raise it to as high as 19 bcm per year under an expansion project. But that project has faced repeated delays.

“Rospan has completed assembly of the key equipment for the first stage of production and preparation of gas and condensate,” Liron told investors. “Start-up and adjustment works are at an advanced stage, and the first commercial gas from the project should start to arrive in a few days.”

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