Rosneft Boosts Gas Production, Profits
Russian state-run giant Rosneft March 19 reported a boost to both profits and its gas production.
Gas production in 4Q 2017 reached 17.55bn m3, up 5.3% on year mainly on completion of maintenance at its Chaivo treatment complex onshore Sakhalin, its Tyumen compressor station and its Sibur gas processing plants, Rosneft said March 19.
Rosneft gas production increased by 2% to 68.41bn m3 in full year 2017, thanks to the Bashneft acquisition in 4Q 2016, and new wells launched at Varyoganneftegaz and new and upgraded wells at Sibneftegaz. The Eni-operated Zohr field offshore Egypt also started up December 2017, in which Rosneft has 30% interest, also contributed; the supergiant field is already producing 400mn ft3/d (at 100% equity). That keeps Rosneft as the second largest gas producer, ahead of third-ranked Novatek which in 2017 produced 63.4bn m3 (down 6% from 2016). Novatek reported profits and gas sales last month.
Rosneft 4Q net profit reached rubles 100bn ($1.73bn), double its 3Q2017 level, while full year 2017 profit grew by 28% to rubles 222bn ($3.84bn). Associated gas use reached 89.2% in 2017.
Among key milestones, Rosneft and BP in December 2017 agreed to implement the project to develop Kharampur and Festival blocks with 880bn m³ in-situ resources located in the Yamal-Nenets region of western Siberia. Rosneft will retain a controlling 51% stake in the project, with BP holding 49%. Also last year, Rosneft and CNPC signed an supplementary agreement to increase the supply of oil transiting through Kazakhstan and to extend the 2013 year contract till the end of 2023; based on the agreement, the volume of oil supplies reaching China will extend to 91mn metric tons for the ten-year period.
BP owns a 19.75% stake in Rosneft, whose CEO is Igor Sechin - who is close to Russian president Vladimir Putin who secured his fourth presidential term in March 18 elections with 76% of votes cast and can stay in office until 2024. Putin's main rival was barred from standing.
Russia's number one gas producer Gazprom’s market capitalisation overtook that of Rosneft last week, according to the data of the Moscow Stock Exchange. As at March 12, Gazprom was worth rubles 3.376 trillion ($58.7bn) compared to Rosneft’s rubles 3.322 trillion ($57.7bn).
Gazprom meanwhile said March 16 it has agreed to purchase two gas turbines totalling 360 MW from German manufacturer Siemens for installation in 2019 at a power plant at Grozny in Russia’s Chechen republic in the Caucasus. Gazprom said the plant will be “mainly powered by natural gas.” Neither it nor Siemens disclosed contract value. The two companies have had a partnership arrangement since 1993.