Russian state-run oil giant Rosneft saw its first-quarter 2023 net profit rise by over 45% to around $4 billion, beating analyst expectations as production increases despite Moscow’s 500,000 barrel-per-day output cuts that started three months ago.
In addition to a 45.5% jump in net profit, Rosneft, headed by Igor Sechin, said it saw EBITDA rise for the quarter by 25.1%, though revenue was down 1.1%.
Analyst expectations based on Interfax polling were lower for net profit, revenue and EBITDA.
Rosneft noted that Q1 oil production increased by 0.8% compared to the third quarter of last year, topping 4 million bpd.
In mid-March, Russia said planned oil output cuts of 500,000 bpd would continue until the end of June. In early April, Moscow said it would extend the production cuts until the end of the year.
While Russian oil flows (seaborne) appear to be slightly decreasing, according to Bloomberg, the market has not yet seen or felt any significant oil production cut from Russia.
While Russian seaborne exports have lowered, Bloomberg shows they remain 270,000 bpd higher than February, which was the baseline volume for Russia’s 500,000 bpd output cut.
Rosneft’s earnings follow those of Russian state-run gas giant Gazprom last week, which posted a significant drop FY 2022 profits amid sanctions and Europe’s push to reduce dependence on Russian gas.
Gazprom FY 2022 profits came in at around $15.4 billion, 41% lower than in 2021. Gazprom blamed the drop on Moscow’s 2022 windfall tax.
Rosneft shares were trading up 2.14% on Wednesday afternoon, following its earnings report.
By Charles Kennedy for Oilprice.com
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Russian exports have broken previous records three times this year in January, March and April when they hit 8.2 million barrels a day (mbd), 8.1 mbd and 8.3 mbd respectively compared with the pre-Ukraine level of 8.0 mbd.
And contrary to Western claims, Russia has been selling its crude well above the price cap and only $5.0-$6.0 a barrel below international price. This means the cap is dead and buried.
Moreover, there is no evidence whatsoever to suggest that Russia isn’t cutting its production as agreed. Russian Deputy Prime Minister Alexander Novak confirmed recently that Russia is indeed cutting its production as it promised.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert