MOSCOW (MRC) -- Rosneft, Russia's biggest oil producer, has announced it has been seeking ways to cope with the negative impact of international sanctions, as it reported higher net income helped by a stronger ruble, as per Themoscowtimes.
Kremlin-controlled Rosneft, which accounts for 40% of Russian oil production, was hit by U.S. sanctions over Moscow's actions in Ukraine, limiting the company's access to Western money. Cooperation with international peers is important to Rosneft, 19.75% of whose shares are owned by BP. ExxonMobil also has a number of joint projects with Rosneft.
Chief Executive Officer Igor Sechin, a longstanding ally of President Vladimir Putin, said the company has been working on a plan to offset the negative effect of the punitive measures. Svyatoslav Slavinsky, in charge of Rosneft's finances, told a conference call that the company does not expect any changes to its joint projects with international majors.
The head of Norway's Statoil, with which Rosneft has plans to jointly develop Russia's Arctic offshore riches and hard-to-recover oil, said it has been studying the sanctions that have been implemented, but there has been no change in their cooperation.
However, Russian companies, including Rosneft, are facing tougher sanctions from the European Union as the deepest East-West spat since the end of the Cold War two decades ago flares.
Rosneft said its net income in the second quarter — before the sanctions were introduced — surged by almost five times year-on-year to 172 billion rubles (USD4.9 billion), beating analyst forecasts, due to a stronger ruble. Rosneft reports in rubles and the stronger currency has a positive impact on its huge foreign currency-denominated debt. The company said its earnings before interest, taxation, depreciation and amortization, or EBITDA, rose to 304 billion rubles (USD8.6 billion), almost in line with expectations. Sales for the period rose to 1.44 trillion rubles (USD41 billion), slightly above the 1.42 trillion rubles (USD40.4 billion) expected by analysts. Rosneft reported it received USD1.9 billion of advanced payments from BP in July under a five-year oil supply deal. Free cash flow surged to 112 billion rubles (USD3.1 billion) while net debt declined to 1.495 trillion rubles (42.5 billion).
MRC