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Rosneft's Q1 2014 Financials Positive But Future Uncertain
May 3, 2014 23:50


Photo Credit: http://inserbia.info
Rosneft boasts positive operating and financial results for 1Q 2014 amid fears for the future after its president has been placed on the US black list.
In Q1 2014, crude oil and liquids production by Rosneft reached 4,189 th. bpd (0.5 percent y-on-y growth) while gas production reached a record level of 13.18 bcm, says its official press release.
The oil giant said it was preparing to put on stream new fields in producing regions which will allow maintaining production while minimizing costs. “The Osoveyskoye field in Timano-Pechora (with 36 mln t of geological C1+ C2 reserves) is being prepared to be commissioned this year as is the North Chaivo field offshore the Sakhalin Island,” reads the statement.
Within the reporting period, Rosneft produced a record-high 13.18 bcm of natural gas, more than doubling its gas production versus Q1 2013. The Company continues its programs to increase associated petroleum gas utilization and intends to reach 95 percent of APG utilization at Vankor by the end of 2014. Under its assets optimization program, the company closed a deal to sell a 49 percent stake in LLC Yugragazpererabotka to SIBUR in March 2014 and signed long-term associated petroleum gas supply and dry gas purchase contracts with SIBUR. These contracts, among others, will help maintain APG utilization in the company’s assets in the Khanty-Mansi Autonomous Area in the long term (through 2032).
In Q1 2014, Rosneft processed 24.87 mln tonnes of crude at Russian and foreign refineries. Euro 5 and Euro 4 fuels now account for circa 57 percent of the Company’s motor fuel output. Fuel oil supplies to premium destinations were increased, an additional premium was obtained by fuel oil marketing from the Samara refineries (with a financial effect of RUB 0.6 bn); premium jet fuel sales grew to 69 percent.
“The Company carried on with successful implementation of Russian refineries large-scale upgrade program in 1Q 2014. onstruction of 4 units at the Ryazan, Novokuybyshevsk and Kuybyshev refineries is scheduled to be completed this year,” says the statement.
Rosneft revenues reached RUB 1,375 bn exceeding Q1 2013 level by 69.3 percent. The revenue growth is mostly due to a bump in crude oil and oil products sales and sales channels optimization which in total compensated for the fluctuations on the oil and petroleum products markets.
Driven by the growing sales volumes and corporate measures to control expenses, EBITDA more than doubled to total RUB 289 bn.
Rosneft’s net income reached RUB 88 bn in Q1 2014, mostly due to the negative effect of non-cash foreign exchange losses in the amount of RUB 84bn. The company’s free cash flow more than tripled to reach RUB 121 bn.

Rosneft repaid some of its loans it raised to buy TNK-BP assets to a total amount of RUB 193 bn which was one of the drivers of the Company’s net debt decrease. The Company also bought back the shares of RN-Holding in amount of RUB 149 bn. 




Author: Mikhail Vesely

Tags: Ukraine crisis Crimea Rosneft Igor Sechin Russian oil and gas industry 

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