Russian oil producer TNK-BP International, which is being acquired by oil giant OAO Rosneft from BP PLC and its partners, said Thursday that its fourth-quarter net profit fell 11% on year to $1.87 billion due to lower sales volumes and higher taxes.
The $55 billion deal in which state-controlled Rosneft will acquire TNK-BP from BP and the AAR consortium of Soviet-born tycoons is expected to close in the first half of this year.
"We have started dialogue with Rosneft on initial preliminary planning. But management remains focused on our performance targets," said TNK-BP Chief Financial Officer Jonathan Muir.
He said total hydrocarbon output is expected to rise about 1% in 2013, with liquids production remaining flat. He also said TNK-BP planned to increase capital expenditure for 2013 to around $6.5 billion.
Fourth-quarter production at TNK-BP--Russia's No. 3 crude producer--was down slightly to 2.02 million barrels of oil equivalent (boe) per day from 2.04 million in the same quarter in 2011. But production overall in 2012 grew by 1.8% compared with the full year figures in 2011, as increased greenfield production offset declines at older fields.
TNK-BP also increased its proven reserves to 9.8 billion boe, replacing 210% of its 2012 production under the U.S. Securities and Exchange Commission's LOF (life of field) standards, or SEC-LOF.
TNK-BP's fourth-quarter revenue was down 8% on the year to $14.4 billion, while earnings before interest, taxes, depreciation and amortization, or Ebitda, were down 9% on the year to $3.19 billion. Net debt at the end of the quarter was $3.86 billion.