Soaring oil prices and cost-cutting efforts lifted Russian state-owned oil company Rosneft to record profits in the first quarter.
The company earned net income of $3.95 billion, up more than 58% from $2.5 billion a year ago, as revenues rose more than 36% year-on-year to $20.1 billion, according to its GAAP results.
EBITDA for the period of $6.6 billion was almost 50% higher than last year’s corresponding figure, while cash flow increased more than sixfold to a record $3.3 billion, resulting in net debt decreasing to $11.1 billion.
Rosneft exceeded its target in the quarter for average daily oil output, which was up 2.9% at 2.3 million barrels per day, driven mainly by the flagship Vankor field in East Siberia.
However, the Kremlin’s decision to cancel a tax concession for Vankor exports from 1 May is likely to put a dampener on the field’s profitability going forward.
Rosneft president Eduard Khudainatov said strict cost control and the implementation of business efficiency measures contributed to the strong results.
The company, whose proposed $16 billion tie-up with BP for Arctic exploration is ensnared in a legal challenge, recently signed a co-operation agreement with compatriot privately owned giant Lukoil to tap greenfield projects in the Russian sectors of the Arctic, Caspian, Black and Azov seas.