Poor financial performance is not surprising for the biggest Russian oil business as 2020 was a horrible year for the whole industry, the CEO of Rosneft Igor Sechin told at the meeting with Vladimir Putin. It is hard to expect the Russian leader to scold the businessman. Rosneft is facing a strategic task that is crucial to develop the Kremlin's high-priority plan to build up the Northern Sea Route and the country's Far North.
Russia's largest oil producer Rosneft announced a nearly 80 percent drop in net profit in 2020 following a record plunge in crude oil price caused by the coronavirus pandemic. Also, the price war which broke out between Russia and Saudi Arabia in March last year and where Igor Sechin, the CEO of Rosneft, played a part caused an unprecedented collapse in oil prices. The state-controlled producer declared a net profit of 147 billion roubles ($2.0 billion) in 2020, down 79 percent compared to the previous year. In 2019, Rosneft recorded a net profit of 705 billion roubles ($9.5 billion). Rosneft's results suffered in particular during the third quarter of 2020, dipping into negative with a net loss of 64 billion roubles ($870 million). It recovered with a net profit of 324 billion roubles ($4.4 billion) in the fourth quarter. This was mainly due to the sale of a 10 percent share in Rosneft's giant Vostok Oil project in the Arctic to Singapore's trader Trafigura. As reported in early January, Trafigura Group's purchase of a stake in the Arctic oil project was funded by a $7 billion loan organized by a Russian bank. Rosneft published its financial statement on Friday (February 12) and just three days later, on Monday (February 15), Vladimir Putin summoned him to the Kremlin. Sechin prided himself that his company was the only global oil giant not to record any losses. The CEO of Rosneft earlier said in a statement that the results remained positive "despite the difficulties of 2020" and allowed for the payment of dividends to shareholders. Rosneft announced the start of operations for Vostok Oil which Sechin described as the "world's largest new hydrocarbon project". The head of Rosneft said production was expected to start in 2024 to reach an output of 100 million tons by 2030.
Photo source: KREMLIN.RU
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