Rosneft’s 2020 Net Income Plummets as Pandemic Hits Energy Demand

By Vladimir Soldatkin

MOSCOW (Reuters) – Russian energy giant Rosneft reported an almost 80% fall in 2020 net income on Friday as the COVID-19 pandemic hit demand for fuel, though it avoided the full-year loss forecast by some analysts.

Rosneft, in which British oil major BP owns a 19.75% stake, said its net income fell 79% to 147 billion roubles, or $2.2 billion.

The company’s shares were up 0.33% as of 1110 GMT.

Global oil and gas producers have see their finances hit hard over the past year as the pandemic has brought much air and road traffic to a halt.

BP plunged to a $5.7 billion loss last year, its first in a decade, and warned of a tough start to 2021 amid widespread travel restrictions.

Rosneft, headed by Igor Sechin, a long-standing ally of President Vladimir Putin, said its average daily oil and gas condensate production declined by 11.4% to 4.14 million barrels last year due to a global deal on output curbs.

It said its 2020 revenue fell by 33.6% to 5.76 trillion roubles, while its earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) dropped 42.6% to 1.2 trillion roubles.

The company will hold a conference call with investors and analysts later in the day. Analysts have said they want to hear more details about Rosneft’s huge Vostok Oil upstream project, in which global commodities trader Trafigura has a 10% stake.

Rosneft said it sold that stake to Trafigura for 7 billion euros ($8.5 billion).

The project will develop pipelines, roads, a sea port and other infrastructure, with crude oil expected to be shipped to Asia and Europe via the North Sea Route from 2024.

($1 = 0.8263 euros)

(Reporting by Vladimir Soldatkin, Olesya Astakhova and Oksana Kobzeva; editing by Jason Neely and Pravin Char)