Rosneft profit soars 55% on TNK-BP revaluation
Moscow (AFP) - Russia's top oil producer Rosneft reported on Tuesday a 55-percent yearly rise in third-quarter profit that came thanks to the unplanned jump in the value of its crucial TNK-BP acquisition.
The ambitious state-owned firm said that $5.2 billion (3.8 billion euros) of its $8.8 billion (6.4 billion euros) in quarterly profit came from "the effect of the preliminary revaluation of TNK-BP assets."
It attributed other quarterly gains to higher crude prices and an uptick in refining volumes.
Rosneft closed the $55-billion (40-billion-euro) TNK-BP agreement in March after waging a hard battle against the tycoon co-owners of the Anglo-Russian venture.
The purchase made Rosneft into the world's largest publicly-listed oil company and helped account for a healthy rise in crude output for the first nine months of the year.
The deal also enlisted BP as a powerful global partner that Russia needs to access untapped East Siberian and Arctic deposits and keep its economically-vital oil exports on track.
Rosneft chief executive Igor Sechin listed a series of strategic achievements for the quarter that included the acquisition of natural gas stakes -- a new target of the fast-rising oil firm.
"In the third quarter we made significant progress in delivering our strategic goals," Sechin said in a company statement.
The reporting period saw Rosneft strike a $1.4-billion (1.0-billion-euro) purchase of the natural gas assets of top world diamond producer Alrosa.
Rosneft is also making progress on a liquefied natural gas (LNG) plant in Russia's Far East that it plans to operate under an agreement with US major ExxonMobil.
The project is being developed in line with new draft legislation lifting the exclusive status on LNG exports enjoyed until now by the natural gas giant Gazprom.
The law's introduction -- tentatively scheduled for the start of 2014 -- would help Rosneft better foster the booming Chinese market that is now trying to wean the industry off its dependence on coal.
Rosneft this month also signed a memorandum with China's state-held CNPC that creates the two nations' first joint venture for developing remote East Siberian fields.
Sechin said positive sentiment also resonated from new tax legislation providing incentives for more risky and expensive projects that Rosneft had avoided before.
"The laws signed in July and September, which encourage development of tight reserves and offshore fields ... have made investment in the Russian oil and gas sector extremely more attractive," said Sechin.
The company said that nearly one-fifth of its oil production in the quarter came from so-called greenfields that remained untouched by Soviet Union due to its lack of technological expertise.
The figure is vital to Russia's overall efforts to compensate for flagging output at old deposits and keep its status as one of the world's most important exporters of oil.
A report by the Economist Intelligence Unit estimates that crude production at Russia's Soviet-era fields -- some of them developed as early as the 1950s -- is falling by two to six percent a year.
Rosneft stock was up nearly one percent on a day of mostly-flat trading on the Moscow Exchange.
