Rosneft’s chief executive Igor Sechin expects Brent could reach US$80 a barrel by this year’s end, Interfax reports citing a TV interview of the oil tycoon. The company’s budget for the year is based on a much lower price, at US$63 a barrel, Sechin added, so it’s hardly a surprise the CEO is happy with where prices are now.
Rosneft reported a sevenfold increase in its net profit for the first quarter of this year on the back of higher oil prices, event though production was lower. The company accounts for about 40 percent of Russia’s total oil production, which has made it key for the production cut Russia agreed with OPEC.
Now that production is once again on the rise following loud complaints from some of the biggest importers of crude, Rosneft stands to benefit more than smaller companies.
The company has made it clear that despite the production cuts, it was eager to boost production both domestically and internationally. It has also launched an ambitious overhaul that should see Rosneft buy back US$2 billion in stock, slash capex by as much as 20 percent and raise its working capital by US$3.15 billion (200 billion rubles) by the end of this year.
Meanwhile, the company is growing in places like Kurdistan and Nigeria. In May, the company announced the discovery of a potentially huge oil field in southwestern Iraq, and a month later, media reported that Rosneft would be partnering with a Nigerian company to develop 21 oil blocks across Africa. Related: Iraq Orders Internet Blackout To Quell Protests
Rosneft doesn’t have a significant presence in Africa except for a 30-percent stake in the giant Zohr gas field offshore Egypt in the Mediterranean, as well as some prospects in Mozambique.
Gaining access to more projects in Africa could be an important development for Rosneft to expand its global footprint, especially since U.S. sanctions on Russia are not seen to be an issue in this region.
By Irina Slav for Oilprice.com
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