Rosneft profits rise 10% to $2.8 bn

26th October 2011, Comments 0 comments

Russia's top oil producer Rosneft on Tuesday posted a 9.7 percent rise in third quarter profits to $2.8 billion (2.0 billion euros) on record production volumes that offset a rise in export duty costs.

The company said production shot up 20.6 percent to 15 million tonnes of oil in the third quarter when compared to the same period a year earlier.

Analysts had forecast a net profit between $2.4 billion and $2.8 billion so the results boosted Rosneft shares to the top of MICEX exchange leader board with a gain of nearly four percent.

EBITDA -- the closely watched figure for earnings before interest and taxes along with other business costs -- rose 13.9 percent to $5.3 billion.

Company chief Eduard Khudainatov called the quarter of "fundamental importance" to Rosneft because it included the signature of an Arctic oil exploration alliance with the US super-major ExxonMobil.

"Our partners not only confirmed their commitment to invest in joint projects but are also ready to share and exchange the latest technologies and experience from international projects," Khudainatov said.

"This will give Rosneft the competitive edge in offshore operations and at deposits with unconventional reserves."

Rosneft's results were hampered by new export duties introduced by the government to help cover a vast social programme it announced in the run up to December's parliamentary and next year's presidential elections.

Ronseft had long lobbied the state not to end the concessionary export duties the company paid on the oil produced at its largest field in the vast Siberia region of Krasnoyarsk.

The firm made diversification of its production base the centrepiece of its last annual meeting and struck the ExxonMobil alliance this summer in the wake of a failed Arctic tie-up with British giant BP.

The ExxonMobil deal will see Rosneft gain access to advanced oil production technology and the US firm help the Russian giant complete the development of its licensed fields in both the Arctic and the Black Sea.

Rosneft also has a promise from ExxonMobil to make it a partner in at least six North American projects -- Russian state oil's first such venture oversees.

Rosneft's joint venture "with ExxonMobil creates a model for unlocking the value of its huge undeveloped resource asset base while carrying minimal exploration and development risk," Renaissance Capital said in a research note.

Analysts said the strong results could also be attributed to the consolidation of the Ruhr Oel refineries in Germany acquired last year.

© 2011 AFP

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