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Rosneft Boosts 2019 Profit Despite OPEC+ Cuts, Tainted Oil Crisis

Russia’s biggest oil producer and largest taxpayer, Rosneft, reported on Wednesday a net income for 2019 that was 29 percent higher on the year, despite market uncertainties and negative factors such as the continued production cuts of the OPEC+ coalition and the oil contamination crisis last spring.   

Rosneft posted a net income attributable to shareholders of US$11 billion (708 billion Russian rubles), up by 29 percent annually, thanks to higher operating income and lower financial and other expenses, the Russian oil giant said in a statement today.

Liquids production averaged 4.67 million barrels per day (bpd), basically flat on the year, “despite the effect of external restrictions, such as the extension of the OPEC+ Agreement and the temporary constraints on the intake of oil into the Transneft trunk pipeline system,” said Rosneft, which generally opposes the restrictions under the OPEC+ deal but has been toeing the line so far.

“The OPEC+ Agreement had an additional impact in terms of production volumes and the timing of new projects,” chief executive Igor Sechin said.

Rosneft’s petroleum product sales increased by 5.3 percent year on year in 2019, chiefly driven by a 20.1-percent jump in crude oil sales volumes.  

Rosneft’s 2019 results release came a day after the United States slapped sanctions on one of its subsidiaries, Rosneft Trading, for helping Venezuela’s Nicolas Maduro to sell crude oil.

In response to the sanctions, Rosneft said in a statement on Tuesday:

“The sanctions announced by the U.S. Treasury Department against Rosneft’s subsidiary RTSA and its Chairman are illegal, unjustified, and an act of legal abuse.”

“Rosneft has been implementing its projects in Venezuela in strict compliance with rules of international and national laws. In the course of the projects’ implementation, the Company conducts exclusively commercial activities for the benefit of its shareholders and does not pursue political goals,” said the Russian firm, adding it would “consider options for its legal protection upon reviewing the documents published.”  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on February 19 2020 said:
    The announcement by Russia’s oil giant Rosneft that it boosted its 2019 profits a day after the United States slapped sanctions on one of its subsidiaries, Rosneft Trading, for helping Venezuela is a real slap on the face of US sanctions.

    While the United States recently granted a sanction waiver to US oil company Chevron to continue operating in Venezuela and helping PDVSA raise its oil production, it slaps sanctions on a Rosneft subsidiary for doing exactly the same.

    Still, US sanctions will neither deter Rosneft nor Russia from supporting Venezuela and helping it sell its crude oil around the world and get paid for it.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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