Ambitious Rosneft's 2010 profits top $10 billion

4th February 2011, Comments 0 comments

Russia's largest oil firm Rosneft, which struck a milestone partnership with BP and is eyeing ambitious global expansion, said Friday its net profits rose 64 percent in 2010 to $10.67 billion.

The results were unveiled as a press report said the Russian shareholders of TNK-BP were considering selling out their stake in the Russian-British oil joint venture to state-controlled Rosneft in a deal worth up to $30 billion.

The 2010 earnings underlined the profitability of Rosneft, which became Russia's largest oil firm after snapping up assets of jailed tycoon Mikhail Khodorkovsky's dismantled private oil giant Yukos in controversial auctions.

Net profits for the fourth quarter 2010 amounted to $3.06 billion, up 19 percent from the third quarter, Rosneft said, a figure that was at the upper end of analysts' expectations.

"We achieved very strong results in 2010, substantially outperforming our profitability and operating targets while also limiting controllable cost growth," Rosneft chief executive Eduard Khudainatov said in a statement.

Driven by higher oil prices and production growth, Rosneft revenues rose by 35 percent in 2010 to $63.0 billion.

The biggest contributors to growth were the Vankor and Verkhnechonsk fields in East Siberia, and also Samaraneftegaz.

"Looking ahead, we are focused on our strategic investment projects, including continuing Vankor's development to deliver peak production in 2014 and our refinery upgrade programme," Khudainatov said.

Rosneft's partnership with BP, personally blessed by Prime Minister Vladimir Putin, last month saw the two firms found a joint venture for Arctic exploration and take a cross holding.

But it has raised questions over the future of TNK-BP which is jointly owned 50 percent by the British oil giant and 50 percent by a consortium of three Russian businessmen.

The High Court in London Tuesday granted a request by the Russian shareholders -- known as Alfa Access Renova (AAR) -- to halt the BP-Rosneft deal after they complained it violated the TNK-BP shareholder agreement.

The Vedomosti daily, quoting sources close to TNK-BP, the Russian government and Rosneft, said no final agreements have been reached but the mechanics of a transaction to sell the AAR stake to Rosneft have already been worked out.

Vedomosti said Rosneft could acquire a controlling stake in TNK-BP by also taking an additional 1 percent from BP itself to have the majority in the company.

A spokesman for AAR declined to comment but Rosneft issued a swift initial denial of the report.

"We are not and were not in negotiations about buying AAR's stake or TNK-BP itself. Of course not," Khudainatov told the Interfax news agency.

© 2011 AFP

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