Rosneft said Monday that its profit rose 18 percent in the first quarter to the highest level since the economic crisis hit the country 18 months ago, after crude prices advanced and output increased. Net income climbed to $2.43 billion from $2.06 billion a year earlier, the company said in a statement. That beat the $2.4 billion average estimate of six analysts surveyed by Bloomberg. Urals crude averaged about $75.30 a barrel, up 71 percent from the first quarter of last year, according to data compiled by Bloomberg. Rosneft boosted crude output 8.4 percent to 2.29 million barrels a day in the quarter after starting production at the Vankor field, the country’s largest oil project, in August.
Rosneft expects export tax exemptions on crude produced at the remote Siberian oil field, which the Finance Ministry has challenged, to last for at least this year. The duty rises and falls with oil prices. “We don’t expect any changes in the near to medium term,” Rosneft vice president Peter O’Brien said in an interview. “Any changes in 2011 or 2012 we understand will be linked to broader tax reform.” Output may rise 4.5 percent this year from last year’s 2.18 million barrels a day, O’Brien said. Rosneft is looking at oil refining assets in Europe after increasing throughput 4 percent to 12.1 million metric tons in the quarter (1 million barrels a day).
“We continue to look at a number of acquisition opportunities in downstream markets where we sell crude oil,” O’Brien said, declining to say whether Rosneft is considering Petroleos de Venezuela’s stake in German refineries or ConocoPhillips’ Wilhelmshaven plant, also in Germany. Revenue rose 79 percent to $14.8 billion. Earnings before interest, taxes, depreciation and amortization, or EBITDA, grew 92 percent to $4.44 billion. “EBITDA outperformance is likely a sign of better cost control or tax breaks in action,” said Artyom Konchin, an oil and gas analyst at UniCredit.
Net income growth was slower than advances in revenue and EBITDA because of a “considerable” foreign exchange gain and low income tax rate in the first quarter of last year, Rosneft said. Export and mineral extraction taxes, which are tied to oil prices, more than doubled in the period. The state-run oil producer paid $3.98 billion in export duties in the quarter and $2.13 billion in mineral extraction tax. Transportation costs increased by about 41 percent to $1.76 billion. Daily output at the Vankor field reached 264,000 barrels a day this month, Rosneft said. The field may reach peak output of more than 500,000 barrels a day in 2014, equivalent to 5 percent of Russia’s current output.
Rosneft cut its net debt to $16.4 billion as of April 30, down $2.1 billion from the start of the year, Rosneft said. The company drew down $998 million in the second quarter from a $15 billion, 20-year Chinese loan facility that makes $5 billion available this year, and it repaid $463 million of other loans, according to its financial statements. Rosneft doesn’t plan to raise debt from other sources this year, O’Brien said.