Surging oil prices, boosted by rebounding economies worldwide, lifted Rosneft’s net profit to 314 billion roubles ($4.4 billion) in the third quarter, versus a loss of 64 billion roubles a year ago, the company said.
“We observe a rapid growth in demand for traditional energy resources,” Rosneft Chief Executive Igor Sechin said in a statement. “As structural discrepancies between supply and demand on global energy markets are further revealed, we may witness a new super cycle on the oil and gas markets.”
The Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, have been increasing output to meet growing demand from late last year, and Rosneft’s oil production rose to 3.98 million barrels per day (bpd), up by 9%, in the third quarter.
Yet at a meeting last week, OPEC+ stuck to a plan to raise oil output by 400,000 bpd on a monthly basis, snubbing calls from the United States for a higher increase to keep oil prices in check.
The price of Russia’s flagship Urals oil blend rose to an average of $70.5 per barrel in the third quarter, up from $43 per barrel a year ago when the demand was still constrained by the pandemic.
To meet rising demand, Rosneft plans to increase investments in new projects, Sechin said, as it ramps-up its Vostok Oil project in Russia’s north, where it sold a 5% stake to Vitol-led consortium for 3.5 billion euros last month.
“The key growth project, Vostok Oil, may result in Rosneft’s output rising throughout this decade, assuming OPEC+ restrictions are eased or lifted entirely,” brokerage Aton said in a note, valuing the entire project at $70 billion.
Rosneft’s earnings before interest, taxes, depreciation, and amortization were at 638 billion roubles in third quarter and revenue stood at 2.3 trillion roubles, up from 366 billion and 1.4 trillion roubles in the same period last year, respectively.
($1 = 71.8400 roubles)