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    Rosneft Profits Up, Gas Output Falls

Summary

Despite its new stake in a giant Egyptian gas field and the relaxation of Opec production constraints, Rosneft's gas production fell.

by: Mark Smedley

Posted in:

Natural Gas & LNG News, Europe, Corporate, Exploration & Production, News By Country, Egypt, Russia

Rosneft Profits Up, Gas Output Falls

Rosneft on November 6 reported 3Q 2018 net income attributable to shareholders of rubles 142bn ($2.15bn). It more than tripled 9M profit to rubles 451bn, from a year-ago figure of rubles 131bn. The company gave no 3Q comparison but NGW reported a year ago that 3Q 2017 profits were rubles 47bn ($791mn).

The state-run oil giant said it cut debt but, as in the past, did not say to what level. “Increasing free cash flow generation and reducing the debt burden become our key strategic goals,” said CEO Igor Sechin. Rosneft said only that its 'short-term' debt was reduced by 11.5% during 3Q2018 to $12.9bn.

Production reached 5.83mn barrels of oil equivalent/day in the quarter, up 2.7% year on year; while 9M2018 production was 5.75mn boe/d, up 0.5%. 

Output split into 16.62bn m3 gas, down 0.2% despite the contribution from its stake in the Egyptian giant offshore field Zohr; and an increase in associated gas output in Russia as Opec production constraints lifted. Liquids production was up 3.4% at 58.68mn metric tons liquids. 

Rosneft said an upgrade of its East Urengoi treatment unit, due to launch in 2019, should boost gas and condensate production by a further 19bn m³/yr and 5mn mt/yr. Also a gas development option at its Kharampur field is expected to launch in 2020 and later plateau at 11bn m3/yr.

Zohr gas production at 100% equity in 9M 2018 was 7.1bn m3, of which 1.3bn m3 was Rosneft's. The latter increased its Zohr equity stake to 30% during the course of this year. Eni said in early September  that Zohr has reached an intermediate plateau level at 100% of 2bn ft3/d (equivalent to 20.7bn m3/yr).

Strong oil and gas prices have boosted Russia's income: the treasury received roubles 12bn more than forecast in October and expects to receive roubles 514bn from oil and gas.