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Russia’s Largest Oil Company Reports Doubling in Q1 Net Profit

Russia’s Rosneft, the largest crude oil producer in the country, reported a 92.8% quarterly increase in its net profit for the first quarter of the year.

Rosneft also said its average daily production had stood at 5.43 million barrels of oil equivalent daily during the reporting period, of which 3.85 million bpd were liquid hydrocarbons.

At the same time, the company acknowledged the adverse effects Western sanctions have had on its operations, cutting off its access to the largest financial markets and consequently adding to its debt load because of higher debt servicing costs.

"High interest rates and limited liquidity available on the country's financial market put pressure on the financial performance, which forces the company to switch to loans in alternative currencies," Rosneft’s chief executive Igor Sechin said.

The strong financial result for the first quarter of 2024 follows a robust 2023 despite sanctions. The net result hit $14 billion and represented a close to 50% increase from 2022 levels.

Meanwhile, Rosneft has become a target for Ukrainian drone attacks on refineries, with its facility in Ryazan, less than 200 miles from Moscow, attacked twice. The first attack came in the middle of March and then the facility was struck again earlier this month.

The refining capacity in Russia that was offline due to drone attacks was estimated by Reuters in mid-April at around 660,000 barrels per day (bpd), compared to 907,000 bpd offline at the end of March. Russia said in early April it could repair all damaged units within two months.

Meanwhile, Reuters reported earlier this week that Rosneft’s exports of crude from the port of Novorosiisk are set to double next month to over 1 million bpd due to the continued idling of its Tuapse refinery. The Tuapse plant was also struck by Ukrainian drones but has been repaired. The reason for the closure and higher exports, according to unnamed Reuters sources, is low profitability.

By Irina Slav for Oilprice.com

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