FSUOGM: Rosneft profits hit record on high prices

Profits at Russia’s largest oil company Rosneft surged to a record-high last year on the back of rising oil and gas prices and economic recovery, which more than offset the impact of OPEC+ restrictions.

The company, which accounts for 40% of Russian oil output, achieved a seven-fold increase in ruble terms in net profit to RUB883bn ($11.8bn), while in US dollar terms, it rose almost sixfold to $11.9bn. 

“Against the background of the recovery of the global economy, the company achieved new financial records in 2021,” CEO Igor Sechin said in a statement, noting that Rosneft’s production costs achieved their lowest level in five years, down 3.6% at $2.7 per barrel of oil equivalent (boe).

Rosneft gained from a 60-70% climb in the price of the oil it exports, as well as a weakening of the ruble. The company’s costs are paid in rubles, while its revenues from exports are in dollars, providing it some relief when the Russian currency is weaker.

Rosneft’s liquids output grew 2.3% year on year to 3.91mn barrels of oil equivalent per day (boepd) in 2021, recovering some ground following a 11% slump in 2020. Rosneft and other Russian producers had to make unprecedented cuts to their oil supply after the coronavirus (COVID-19) pandemic began as part of Moscow’s OPEC+ commitments. Those cuts have mostly been eased now, but will not fully end until April.

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