Rosneft second quarter profits rise 10.8%

29th July 2011, Comments 0 comments

Russia's largest oil firm Rosneft on Friday said net profits for the second quarter rose 10.8 percent from the same period a year earlier to $2.83 billion, on high crude oil prices and increased output.

"We posted good results for the second quarter, including record operating figures," the state controlled firm's chief executive Eduard Khudainatov said in a statement.

However the earnings were well down on the results from the first quarter, when Rosneft posted net profits of $3.9 billion. They were also lower than analysts' expectations, with Alfa Bank forecasting second quarter net income of $3.04 billion.

For the first half, net profits rose 34 percent from the same period last year to $6.77 billion, with average crude oil output increasing 2.7 percent year-on-year.

It said that the increased reflected higher production at the Vankor and Verkhnechonsk fields in eastern Siberia and crude output growth at the Sakhalin-1 on the northeast shelf of Russia's Pacific island of Sakhalin.

However the company noted that profits were pressured by a rise in the tax burden, a strengthening of the rouble against the dollar, and higher transportation and electricity tariffs.

"Ongoing performance improvement, investment programme implementation and higher shareholder returns are our priorities for the near future," said Khudainatov.

Rosneft grew rapidly into Russia's largest oil firm after snapping up assets held by jailed tycoon Mikhail Khodorkovsky in controversial auctions.

But Rosneft's year has been blighted by the collapse of an ambitious deal with British energy giant BP to form a joint venture and explore Russia's vast Arctic oil reserves.

The deal -- personally blessed by Russian Prime Minister Vladimir Putin -- collapsed when BP's partners in its other Russian joint venture TNK-BP complained it infringed their own shareholder agreement.

Rosneft has said it is now looking for new partners to explore Russia's Arctic Shelf and is no longer interested in a tie-up with BP.

Rosneft has already held talks with Anglo-Dutch firm Royal Dutch Shell. ExxonMobil of the United States and Norway's Statoil have also been reported as possible partners.

© 2011 AFP

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