Russia’s Rosneft oil posts shock quarterly

MOSCOW - Agence France-Presse

Rosneft’s top name Igor Sechin speaking during a press conference.

Russia’s main oil producer Rosneft nas delivered a shock second quarter net loss of $250 million, hit by falling energy prices and prohibitive export duty rates.

Analysts had expected the state-held company’s profits to suffer in the second quarter but they should still have come in at around $1.0-2.0 billion on the back of stable output and demand.

Net profit was $2.8 billion in the second quarter of 2011 and $3.8 billion in the first three months of 2012, showing the extent of the turnaround.

“Financial results of the first half of 2012 reflect the current economic situation, which is characterized by falling oil prices, higher export duties and considerable exchange rate volatility,” Rosneft chief executive Igor Sechin said.
 
Partnership steps

Sechin also highlighted the quarter’s positives by noting two major Arctic field exploration agreements that Russia’s largest company had struck with Italy’s ENI and Norway’s Statoil in recent months.

Rosneft “took a number of strategic steps to expand partnerships with international companies in hard-to-recover oil and offshore operations, and stepped up cooperation with the Russian government to create a favorable tax regime for such projects,” Sechin said.

The rapidly growing firm is responsible for about a fifth of Russia’s oil production and has recently developed into a Western investment darling because of its exclusive rights to previously untapped northern sea.