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Rosneft, Oil Leviathan & Russia’s Largest Oil Producer, Shuts Operations In Venezuela

Unic Press UK: Oil giant and Russia’s biggest player in the petroleum industry, PJSC Rosneft Oil Company, said that its operations in Venezuela have been discontinued.

In a press release last week, PJSC Rosneft said:

In second quarter of 2020, the Company closed a previously announced transaction to transfer to a company that is 100 % owned by the Government of the Russian Federation all assets in Venezuela, including participation shares in projects of Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria, as well as oil-field service companies and trading operations. Company’s operations in Venezuela have been completely discontinued.

The company said its sales decrease of 15.0% compared to 1Q 2019 was mainly due to a decline in world crude oil prices (-23.6%), though partially offset by higher sales volumes. Other highlights in the press release, especially on Rosneft’s Financial results for 1Q 2020, are:

  • Positive free cash flow of USD 3.5 bln in spite of lower crude oil prices
  • EBITDA decreased by more than a third on the back of sharp decline in oil prices
  • Negative Net income due to RUB depreciation and revaluation of foreign currency denominated liabilities
  • Effective control over the costs: upstream opex decreased to 2.9 USD/boe
  • Interest expenses dropped by 25% YoY
  • Decrease in financial debt and trade liabilities by USD 9 bln
  • Launch of share buyback program on the open market

Rosneft believes that 2020 is on the verge of becoming a turning point for the global oil and gas industry due to the COVID-19 pandemic, which has provoked an unprecedented decline in demand for crude oil and a significant drop in energy prices. The company further observes that, in this present/uncertain situation, the quality of the resource base, diversification of sales markets, long-term nature of relations with consumers and high level of operational and financial efficiency comes to the fore.

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