Gazpromneft reports bumper 3Q profits

Russia's state-controlled Gazpromneft cashed in on the higher oil and gas price environment in the third quarter by boosting upstream and downstream production. The firm increased profits fivefold on the year, doubled its operating cash flow and wiped almost $2bn from its net debt.

Upstream oil and gas output rose by 8pc from a year earlier to 2.05mn b/d oil equivalent (boe/d) in July-September. Liquids production grew by 6pc over the same period on the back of Russia's rising Opec+ crude quota, while natural gas production was up by 14pc thanks to the launch of gas infrastructure at the Tazovskoye oil field.

"Gazpromneft proactively increased hydrocarbon production in the third quarter. For the full year, the company is expected to produce over 100mn toe [2mn boe/d] for the first time in its history, with further growth potential next year," chief executive Alexander Dyukov said.

In the downstream, Gazpromneft took advantage of rising prices for oil products by ramping up its refinery throughput to 11.77mn t in the third quarter, up from 10.67mn t in the same period last year. The company said the growth was underpinned by improved conditions in the domestic market, with sales of refined products through premium channels up by 1mn t on the year to 7.22mn t.

Gazpromneft reported a profit of just under 140bn roubles ($1.92bn) in July-September, compared with just Rbs28bn a year earlier. Operating cash flow came in at around Rbs276bn, compared with Rbs137bn in the third quarter of 2020. The sharp rise in cash flow helped the firm cut its net debt to Rbs250bn at the end of September from Rbs388bn three months earlier.

"The company's leverage has declined to its lowest level in 12 years," Dyukov said.

By James Keates