Rosneft says profit increased sevenfold

OAO Rosneft, Russia's biggest oil producer, said first-quarter profit surged sevenfold, beating analysts' estimates, after the purchase of production units and refineries from bankrupt OAO Yukos Oil Co.

Net income jumped to $2.56 billion from $358 million a year earlier, the Moscow-based company said yesterday. That's more than the $2.46 billion median estimate of 10 analysts surveyed by Bloomberg.

State-run Rosneft was transformed from a second-tier oil company into Russia's largest producer after buying assets from Yukos as then-President Vladimir Putin increased the government's control of Russia's energy assets. Yukos was crushed under more than $30 billion of back-tax claims.

"In general we're pleased with the results, we're encouraged by the material growth in all the main financial indicators," Rosneft's Vice-President for Finance Peter O'Brien said.

Rosneft borrowed $22 billion to buy units and refineries at auctions last year after former Yukos Chief Executive Officer Mikhail Khodorkovsky was jailed for tax evasion and fraud.

Sales in the quarter nearly doubled to $16.4 billion. The price for Urals crude, Russia's export blend, averaged $92.84 a barrel in the period, up 70 percent, according to data compiled by Bloomberg. Net debt fell by $2.7 billion to $23.6 billion as of March 31 as free cash flow amounted to $2.76 billion for the period.

Rosneft fell 1.40 ruble, or 0.5 percent, to 277.00 rubles in Moscow trading.

Agencies

(China Daily 06/10/2008 page17)