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Russia’s largest oil producer, Rosneft, reported on Monday a higher net income in the first quarter compared to both the fourth quarter of 2018 and Q1 2018, thanks to higher oil prices and the depreciation of the Russian ruble against the U.S. dollar.
Rosneft’s net income in Q1 2019 in rubles jumped by 61.7 percent year on year, to US$2 billion (131 billion Russian rubles), mostly attributable to higher operating profit and a foreign exchange gain.
Revenues jumped by 20.6 percent on the year in rubles, thanks to higher volumes of crude oil and petroleum products sales, which grew by 7.6 percent, and to the rise in crude oil prices in rubles, up 12.7 percent on the year, on the back of the Russian currency depreciation.
“Despite the volatility and quarterly decrease in oil prices, the decline in oil production under the OPEC+ Agreement and the Agreement on stabilization of prices for petroleum products on the domestic market, in Q1 2019 the Company demonstrated healthy financial performance in terms of both earnings growth and strong free cash flow generation,” Igor Sechin, Rosneft’s Chairman of the Management Board and CEO, said in a statement.
Despite the OPEC+ agreement, Rosneft’s production rose in the first quarter of this year compared to Q1 2018, the company said in a separate press release.
Rosneft’s Q1 2019 liquids production amounted to 4.74 million bpd, up by 3.9 percent from the first quarter of 2018, due to active development of greenfields and production ramp-up at several brownfields.
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Due to the compliance with Russia’s pledge in the OPEC+ production cut deal, however, Rosneft’s output declined by 1 percent in Q1 2019 compared to Q4 2018.
Rosneft, which alongside other Russian companies is said to be reluctant to continue to cut production after June, said today that it could “promptly” raise production if restrictions are eased.
“The Company has substantial potential to promptly increase production on the back of flexible well stock and well operations management approaches. In case of external restrictions ease the Company is able to secure over 4.8 mmbbl of average daily liquids production in Russia by the year-end,” Rosneft said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.