Rosneft achieves record revenue, EBITDA in 2024

Russia’s largest oil producer Rosneft reported record revenue of RUB10.14 trillion ($12.7bn) in 2024, an 11% year-on-year increase, driven by higher prices for Urals crude, according to the company’s annual results released on March 20. The previous record was set in 2023 at RUB9.2 trillion.

Despite the revenue growth, net profit fell 14.4% to RUB1.08 trillion, primarily due to non-cash factors, including a revaluation of tax liabilities in anticipation of a rise in the corporate income tax rate to 25% from 2025. CEO Igor Sechin also cited increased borrowing costs and the impact of currency revaluation as contributors to the decline, noting that interest expenses rose 50% amid what he described as the highest real interest rate globally, maintained by the Central Bank of Russia (CBR).

EBITDA rose 0.8% to RUB3.03 trillion, marking the best result in Rosneft’s history. Capital expenditure increased by 11% to RUB1.44 trillion, driven by investments in exploration and production assets. Adjusted free cash flow declined 9% y/y to RUB1.295 trillion. Net debt to EBITDA stood at 1.2x at the end of 2024, despite what the company called adverse macroeconomic conditions.

Rosneft’s total hydrocarbon production reached 255.9mn tonnes of oil equivalent (toe), or 5.2mn barrels of oil equivalent per day (boepd), with liquid hydrocarbons (oil and condensate) accounting for 184mn tonnes and natural gas output totalling 87.5bn cubic metres. The company maintained its position as Russia’s largest independent gas producer, with over one-third of gas output derived from projects in the Yamalo-Nenets region launched in 2022.

Unit lifting costs averaged $2.9 per barrel of oil equivalent (boe). In exploration, Rosneft drilled over 12mn metres in development wells, bringing more than 3,000 new wells online, 72% of which were horizontal. It conducted 1,200 linear kilometres of 2D and 5,300 square kilometres of 3D seismic surveys, with 62 exploration wells tested at a success rate of 89%. The company discovered seven new fields and 97 hydrocarbon deposits, adding 200mn toe in reserves, bringing total reserves under Russian standards to 21.5bn toe and 11.4bn tonnes under international PRMS 2P classification.

In refining, Rosneft processed 82.6mn tonnes of crude in 2024 and sold 43.6mn tonnes of petroleum products domestically, including 13.1mn tonnes of gasoline and 18.1mn tonnes of diesel. The company sold 10.1mn tonnes of fuel on exchanges, double the regulatory requirement.

Within its flagship Vostok Oil project, Rosneft completed 700 km of 2D and 600 square km of 3D seismic surveys, with four wells tested and drilling ongoing at additional sites. The project expanded from 52 to 60 licence blocks, increasing its resource base to 7bn tonnes under Russian classification.

In 2024, Rosneft paid over RUB6.1 trillion in taxes and other payments to the Russian budget, a record contribution both for the company and the national economy, Sechin said, reaffirming Rosneft’s status as the country’s largest taxpayer.

Amid market turbulence, Rosneft repurchased 2.6mn shares at an average price of RUB443.7 in late 2024. It also paid interim dividends of RUB36.47 per share, with analysts projecting total 2024 dividends at approximately RUB51 per share, equating to a yield of around 10%.

Despite robust financials, analysts noted Rosneft’s heavy tax burden and high interest rates as challenges, particularly under Western sanctions. Sechin emphasised the company’s resilience amid OPEC+ output restrictions, inflationary pressure, rising tariffs and heightened security costs, calling for a reassessment of fiscal policy for the sector.