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Rosneft's second quarter held back by output pact, weaker prices
August 4, 2017 / 7:32 AM / 3 months ago

Rosneft's second quarter held back by output pact, weaker prices

MOSCOW (Reuters) - Russia’s largest oil producer Rosneft reported an 11.1 percent year on year rise in second quarter crude oil output on Friday but is sticking to Russia’s pledge to curb production.

The logo of Russia's oil producer Rosneft is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. REUTERS/Sergei Karpukhin

Russia and other global producers have agreed to cut output by 1.8 million barrels per day until March 2018, but production levels are higher than they were last year.

Compared to the first quarter, its average production fell by 1.2 percent to 4.57 million barrels per day, it said, citing “the limitations on Russian oil producers related to the agreements with the OPEC countries”.

Prices also slipped from the first quarter.

“In the second quarter of 2017, the average crude oil price declined by 9.2 percent in rubles terms, having a considerable negative impact on key financials,” Chief Executive Officer Igor Sechin said in a statement.

Net profit of 68 billion rubles ($1.13 billion) beat the 63 billion expected by analysts but was down from 89 billion a year earlier.

In tonnes, second quarter oil output slipped to 56.08 million from 56.12 million in the first quarter but was up from 50.49 million a year earlier.

The year-on-year increase was powered by development of new assets such as Suzun and Messoyakhaneftegaz, as well as production growth at brownfield sites such as RN-Yuganskneftegaz (+2.3 percent) and Samaraneftegaz (+3.2 percent), Rosneft said.

Later this year it plans to launch its Yurubcheno-Tokhomskoye field, which is expected to produce 2.5 million tonnes of crude per annum.

Core earnings before interest, taxation, depreciation and amortization (EBITDA) fell to 306 billion rubles in the second quarter from 348 billion a year earlier.

Revenue of 1.4 trillion rubles topped a Reuters poll forecast of 1.3 trillion rubles and was up from 1.2 billion a year earlier.

Rosneft said its net debt stood at 2.2 trillion rubles with free cash flow of 128 billion as of June 30.

Rosneft’s results include the output and financials of smaller rival Bashneft which it bought in October.

Reporting by Olesya Astakhova; writing by Denis Pinchuk; editing by Dmitry Solovyov and Jason Neely

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