Russian Novatek 2017 Profit Up on Prices

Russian independent Novatek  reported a full-year adjusted profit before after interest, depreciation, amortistion (Ebitda) of rubles 256.5bn ($4.5bn), up by 5.8% on 2016, mainly owing to higher oil and gas prices. It sold a little more gas in Russia than in 2016 and there was also the first cargo of LNG sold to international markets in late December, it said February 21. This year it should bring onstream its second train, giving the Yamal LNG joint venture, which Novatek operates with 50.1% share, 11mn mt of sales potential.

However pretax profit was down a third, at rubles 201bn and its actual profit down 40% at rubles 156bn. Its profit in 2016 was "significantly impacted" by the sale of a 9.9% equity stake in Yamal LNG and by the foreign exchange differences (including at the joint ventures level). Excluding these effects, its profit for 2017 would have been up by 16%. 

In 2017, it sold 65.0bn m³, just 0.5% more than in 2016. Liquid hydrocarbons sales were down 5.4% at 15.9mn metric tons, owing to a natural decline in gas condensate at mature fields. 

In 2017, Novatek "significantly increased" its resource base in the core Yamal Nenets region and adjacent areas, acquisitions including two producing fields: the West-Yaroyakhinskoye and the Syskonsyninskoye fields.