Sechin announced the growth of production volumes despite external conditions

“Rosneft” showed growth in production volumes, despite the deterioration of external conditions, the growth driver was the Sakhalin-1 project. About it declared Chairman of the Board and Chief Executive Officer Igor Sechin.

“In the first quarter of 2023, despite the deterioration of the external environment,”Rosneft” was able to demonstrate an increase in production volumes, both liquid hydrocarbons and gas. The main growth driver was the Sakhalin-1 project, within which daily production increased by 1.8 times quarter on quarter,” Sechin said.

He added that the forced downtime after the departure of the American company ExxonMobil from the position of the project operator had a negative impact on the technical conditions for field development.

The company’s net profit in the first quarter of 2023 amounted to RUB 323 billion, up 45.5% quarter-on-quarter, mainly as a result of an increase in operating profit. The company reported that in the reporting period EBITDA increased by 25% and amounted to 672 billion rubles. The margin of the indicator reached 36.7%. In the first quarter, the volume of oil refining in Russia reached 22.6 million tons, the refining depth increased to 76%, and the yield of light oil products to 57.1%.

In the first quarter, the production of liquid hydrocarbons increased by 0.8% to 4 million barrels. per day. Average daily gas production exceeded the previous quarter by 2.7% and amounted to 1.5 mmboe. Carbon production was 5.6 million boe, up 1.3%.

Rosneft clarified that work on the flagship Vostok Oil project is progressing on schedule.

Pressure on the company’s performance was exerted by changes in the Tax Code, an embargo on petroleum products by a number of unfriendly countries and a restriction of oil production in the country, which began in March, Sechin said. “The influence of the last factor is not so significant in the reporting quarter, but it will significantly affect the performance of the next one,” he said.

Sechin spoke about the work to reduce operating costs to a minimum level, despite the growth of tariffs of natural monopolies. “Thanks to strict cost control in the first quarter of 2023, unit operating expenses for hydrocarbon production and oil refining in the Russian Federation decreased by 5.0% and by 12.7%, respectively, quarter-on-quarter,” the top manager said.

May 30 Rosneft Board of Directors recommended to pay final dividends for 2022 in the amount of RUB 17.97. per share, the recommendation will be considered by Rosneft shareholders at the annual meeting on June 30, 2023 in the form of absentee voting. Experts told Vedomosti that the announced size of the company’s final dividend “meets expectations.” Analysts also allow the growth of the company’s dividends by the end of 2023 and say that the company may become the only one in the industry that will maintain high profits.