November 20, 2008
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Home / Issue Archive / 2007 / May #5 / Today's Top Story ---- Rosneft Report Declining Earnings, Blame Export Duty

№ 5 (May 2007)

Today's Top Story ---- Rosneft Report Declining Earnings, Blame Export Duty

Russian state controlled company Rosneft reported a 25% decrease in earnings in the first quarter of 2007 compared to the first 3 months of 2006 linking it to the growth in export duties and ruble’s growing value.

By Sergei Balashov

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Rosneft’s Q1 earnings dropped from last year’s $750 million to $602 million whilst the revenue grew to $8.22 billion, or a 12 percent increase which is largely due to Rosneft’s producing capacities which skyrocketed together with the Yukos assets acquisition to make for 20 percent of the country’s total oil production. According to corporate information, Russia’s second biggest oil company pumped 147.92 million barrels of oil and produced 3.8 billion cubic meters of natural gas in the first quarter of the year while the export taxes grew by 23.8 percent and the value of the national currency went up 11.7 percent.

“The decrease in both EBITDA and net income in the first quarter of 2007 over the same period in 2006 was largely due to an increase in export duties and real ruble appreciation,” said Rosneft’s official statement.

Despite financial losses, the company’s operating costs went down. Rosneft reports its operating expenses were down 26% quarter-on-quarter while general and administrative expenses were down 7% quarter-on-quarter.

Rosneft is a vertically-integrated Russian oil and gas company with upstream and downstream operations in each of Russia’s oil-producing regions. Headquartered in Moscow, it is among the world’s largest publicly traded oil companies in terms of proved oil reserves (14.9 bln bbls) and among the top ten globally in crude oil production. Rosneft operates eleven oil and gas producing enterprises across Russia and is involved in over ten world-class exploration projects. The company’s proved oil reserves amount to 14.88 billion barrels and gas reserves 690.52 billion, or 18.94 billion boe in total reserves.

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