Rosneft back to profit in second quarter

MOSCOW: Russia’s largest oil producer Rosnet made a second-quarter profit of 43 billion roubles ater reporting a loss in the previous three months thanks to a rise in oil prices, it said.

Rosnet, headed by Igor Sechin, a long-standing ally of President Vladimir Putin, is the first big Russian oil company to report financial results for the second quarter, when oil prices started to rebound ater hiting a 21-year low in April.

The oil market, under pressure from overproduction and the fallout from the coronavirus crisis, has been on a recovery path thanks to a global deal between OPEC and other leading oil producers, including Russia, to cut oil production.

The company, which accounts for more than 40% of Russia’s total oil output, said it produced 4.04 million barrels of oil per day ( bpd) in the second quarter, down 13% from the previous quarter, due to the global output reduction deal.

Didier Casimiro, Rosnet’s first vice president, told investors on a call that the company had increased daily oil production in early August by around 6% from July, in line with the easing of output curbs by the OPEC+ group.

Rosnet expects the company’s, and Russia’s overall, oil production to remain stable in August-december. A company official also said Rosnet’s capital expenditure may increase to 1 trillion roubles in 2021 from a downwardly revised 750 billion roubles in 2020.

Rosnet gave a dollar figure of $700 million for its April-june earnings, saying the conversion was calculated using average monthly Central Bank of Russia exchange rates for the reporting period.