Gazprom Neft slips in Q1 2020 into red on weak ruble and oil prices, but refining volumes up

St Petersburg, May 29 - Neftegaz.RU. Gazprom Neft's losses amounted to 13.806 billion rubles ($194 million) in 1Q 2020, compared to 107.9 billion rubles net profit a year earlier. Core earnings (adjusted Ebitda) halved to 99.1 billion rubles.

The company´s revenue in Q1 2020 declined 12.2% year on year to 515 billion roubles. Gazprom Neft said that the drop in revenue reflects a decline in oil demand, as well as lower prices of oil & oil products, the negative impact of deferred export duties, and the decrease of the joint ventures’ contribution to the company’s EBITDA.

Despite these weaker numbers, Gazprom Neft increased its hydrocarbon production by 6.7 % to 24.79 million tonnes in oil equivalent in Q1 2020 compared to the same period last year. Refining volumes at Gazprom Neft’s refining assets amounted to 10.3 million tonnes in Q1 2020, up 3.2% year-on-year.

The company sold 5.7 million tonnes of oil products, increasing the sales of lubricants and service fluids by 28.6% and bringing 7 new products to the market. Gazprom Neft also increased its production and sale of environmentally-friendly marine fuels, with the Omsk Refinery starting the production of a new low-sulphur fuel from January 2020.

Alexander Dyukov, CEO of Gazprom Neft commented the company’s performance in Q1 2020: “We were ready for the unprecedented situation caused by the COVID-19 pandemic, the drop in oil demand globally, and the decrease in oil price. Gazprom Neft launched its integrated and wide-ranging ‘Antivirus’ programme aimed at protecting its employees. This has made it possible to avoid mass outbreaks at Gazprom Neft facilities, maintain the company’s operations and production, and support the regions in which the company operates. This new challenge has confirmed the veracity of our strategic focus on digital technologies, which means many processes can be managed remotely and with increased safety.”

Dyukov added that Gazprom Neft continues to implement its major projects, and that the current market environment does not affect the company’s long-term objectives outlined in its Strategy 2030.

To read the full story in Russian.