Novatek returns to profit in Q1

Russian LNG exporter Novatek returned to a net profit of 65.15bn rubles ($873mn) in the first quarter of 2021, compared with a loss of 30.7bn rubles a year earlier, the company reported on April 28.

The main factor behind Novatek's loss in Q1 2020 was the ruble devaluation that resulted from the slump in oil prices in March last year and COVID-19's impact on the Russian economy. This inflated the Russian producers' foreign denominated debts.

Excluding the foreign exchange factor, though, Novatek's normalised profit also increased in Q1 2021 to 75.77bn from 53.56bn rubles a year earlier. Revenues surged to 240.7bn from 182.6bn rubles. Novatek gained from higher prices and higher production, which averaged 1.76mn barrels of oil equivalent/day in Q1 2021, versus 1.65mn boe/d a year earlier.

Novatek spent 41.4bn rubles in capital expenditure in 2020, up slightly from 41.1bn in the previous year. The funds went towards Novatek's LNG projects and the launch and further development of the North-Russkiy field cluster which supplies the Russian gas market, as well as oil development at the East-Tarkosalinskoye and Yarudeyskoye fields and exploratory drilling.

Novatek reported earlier in the day it had concluded 20-year LNG sales and purchase deals covering the Arctic LNG-2 terminal's entire production with its partners in the project.