Russia's largest oil company, Rosneft, said on Thursday its profits for the first quarter were down 19.7 percent by comparison with the same period last year. The company's profits, measured in line with US accounting standards, equalled 2.06 billion dollars (1.48 billion euros), compared to 2.56 billion dollars in the same period last year, the company said in a statement.
Rosneft noted a 165 percent jump in profits from the fourth quarter of last year, attributing this to cost cutting and the depreciation of the ruble. But is said that "negative factors included lower average prices for crude oil and petroleum products, higher inflation rates, growth of monopoly tariffs and weakening of domestic demand."
Due to abnormally low Siberian temperatures, Rosneft's crude oil output decreased by 0.8 percent in the first quarter compared to the previous quarter to 2.11 million barrels a day. Output had recovered by late March and reached a historical high of 2.136 million barrels a day in the second half of May.
Company chairman Sergei Bogdanchikov commented: "In the first quarter Rosneft demonstrated outstanding flexibility in managing costs and product flows, which drove net debt reduction of more than two billion dollars despite a fall in the crude oil price of more than 50 percent compared to the first quarter of 2008. "Throughout 2009 we will continue to focus on cost improvements, net debt reduction, strategic projects, including launch of our Vankor field," he added.
Rosneft has been saddled with massive debts after taking over large chunks of the Yukos oil company of jailed tycoon Mikhail Khodorkovsky. Wednesday's statement said Rosneft had reduced its debts by 2.04 billion dollars in the first quarter to 19.2 billion dollars.