Rosneft second-quarter profit falls 22% after crude prices slump

STEPHEN BIERMAN

MOSCOW (Bloomberg) -- OAO Rosneft, Russia’s largest oil producer, said profit fell 22% in the second quarter after crude prices slumped by almost half from a year earlier.

Net income declined to 134 billion rubles ($2 billion) compared with 171 billion rubles a year earlier, the Moscow-based company said in a statement on its website. That was higher than the 95.5 billion ruble estimate of five analysts surveyed by Bloomberg. Revenue dropped 8.6% from the second quarter of last year to 1.31 trillion rubles.

Brent crude has fallen in the past year after the Organization of Petroleum Exporting Countries chose to defend market share over supporting prices amid a production glut. Russian oil producers have benefited from lower service costs as crude, the country’s biggest export, weakens the ruble.

Rosneft increased drilling in the first half of the year as crude output fell 1.1% from the first six months of 2014. Natural gas output climbed 16% to 1.05 MMboed, pushing total oil and gas production to an average 5.175 MMboed in the first half.

Net debt fell 7.9% in the second quarter to $39.9 billion, according to the statement.

Rosneft, about 70% owned by the Russian government, announced changes to its accounting method for foreign-currency risk earlier this year. BP Plc holds a stake of almost 20% in Rosneft.