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Russia’s biggest oil company Rosneft reported record-high free cash flow and a near three-fold increase in net profit for the second quarter on the back of higher oil prices combined with a weaker Russian ruble, which reduces oil producers’ expenses.
Rosneft’s net profit came in at US$3.6 billion in the second quarter, up from US$1.5 billion in the first quarter, and the free cash flow figure was the same—US$3.6 billion—versus US$2.5 billion three months earlier.
The company boasted improvements in efficiency over the second quarter of the year, along with the ruble’s depreciation and the rise in crude oil prices, as factors that contributed to its strong performance, which also pushed up BP’s bottom line for the quarter as well. Cost control was also among the contributing factors for Rosneft’s performance, with the company noting in its report that upstream operating expenses in the three-month period fell to US$3.10 per barrel of oil equivalent, from US$3.30 in the first quarter.
Net debt was also down, by 12 percent in dollar terms, and now Rosneft plans to focus more efforts on slimming it down further.
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At the same time, Rosneft’s crude oil production was almost unchanged in the second quarter: it registered an uptick of less than a percent from the first quarter and from a year earlier, at 4.6 million bpd. The company said it had the “technological capacity” to boost crude production by 200,000 in the current quarter, and it had already added some 120,000 bpd of this increase between June and July, following the OPEC+ agreement to suspend production cuts.
Gas production, on the other hand, declined in the second quarter due to seasonal factors and maintenance, Rosneft said, adding, however, that its share of gas production from Eni’s huge Zohr field in Egypt had risen as a result of the overall boost of production there.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.