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Oil Prices Fall On Significant Crude Build

Oil Prices Fall On Significant Crude Build

Oil prices fell on Wednesday…

Oil Demand Growth Starts To Weaken In Asia

Oil Demand Growth Starts To Weaken In Asia

Oil demand from Asia’s key…

Rosneft’s Profit Drops 49%, Gazprom Neft Boosts Income 82.5%

Russia Oil

Two of Russia’s major oil producers - Rosneft and Gazprom Neft - reported Wednesday their respective 2016 financials which showed that the oil giant’s full-year profit tumbled 49 percent, while Gazprom’s oil division saw its 2016 net income surge 82.5 percent.

Rosneft reported a 2016 net income of US$3.13 billion (181 billion rubles), down by 49 percent on the year as lower oil pricing weighed on the sales. The group’s EBITDA, however, increased by 2.7 percent, mostly due to the consolidation impact from the Bashneft acquisition.

In the fourth quarter, higher oil prices helped Rosneft boost its revenues and EBITDA. Revenues jumped by 21.4 percent compared to the third quarter of 2016, and EBITDA rose 25 percent sequentially in the fourth quarter. Rosneft’s fourth-quarter net profit doubled from the third quarter to come in at US$899.2 million (52 billion rubles), driven by higher operating profit, the company said.

Under a new dividend policy, Rosneft will pay dividends to shareholders at least twice a year, so this year’s payments might include not only the distribution of 2016 profit, but also interim dividends for 2017, it said. The oil giant also boasted positive free cash flow for the past 19 quarters.

Gazprom Neft, for its part, booked a net profit of US$3.459 billion (200 billion rubles) for 2016, an 82.5-percent annual surge, due to its strategic projects and a rise in Arctic production.

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In 2016, the company commenced the full-scale development of the Novoportovskoye and East Messoyakhskoye continental fields. At Prirazlomnoye, the only producing field on the Russian Arctic shelf, production in 2016 increased 2.5 times compared to 2015,” Chairman of the Management Board, Alexander Dyukov, said.

Gazprom Neft’s sales and EBITDA increased both in the full-year and in the fourth quarter compared to the third quarter, thanks to production growth and increased efficiency.

Last month, Gazprom Neft said that it had launched production from two new wells at its Arctic oil field Prirazlomnoye, bringing the total to six. Prirazlomnoye is the first Russian Arctic oil project, and this year, output is seen at 2.6 million tons of crude, or 19.06 million barrels, despite a three-month technical maintenance shutdown of the same-name platform during the summer.

By Tsvetana Paraskova for Oilprice.com

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