February 5, 2019 / 9:14 AM / 2 months ago

Rosneft upbeat on Venezuela, sees oil output rising in 2019

MOSCOW (Reuters) - Russia’s largest oil producer Rosneft said on Tuesday the political upheaval in Venezuela was only temporary, while the country had cut its debt, and expected its own total oil output to grow in 2019.

The Rosneft logo is pictured on a safety helmet in Vung Tau, Vietnam April 27, 2018. REUTERS/Maxim Shemetov/Files

Kremlin-controlled Rosneft’s operations in Venezuela have come into focus as the country has plunged into political turmoil and the United States imposed sanctions on state oil company PDVSA last week.

PDVSA is paying debt back to Rosneft via oil supplies. Rosneft’s operations in Venezuela have come to public attention amid a power struggle between the National Assembly and pro-Moscow President Nicolas Maduro.

In a presentation on its website, Rosneft said Venezuelan state oil company PDVSA’s principal amount of debt to Rosneft stood at $2.3 billion at the end of the fourth quarter, down from $3.1 billion at the end of the previous three months.

The company does not expect oil output to decline at its projects in Venezuela this year, Rosneft’s First Vice President Eric Liron said on a conference call, adding that the company saw the current situation in Venezuela as temporary.

Venezuela’s own oil production has plummeted due to years of underinvestment and weak oil prices.

WEAKER PROFIT, STRONGER OUTPUT

Earlier on Tuesday, Rosneft, in which BP controls a 19.75 percent stake, said its net profit fell by almost a quarter to 109 billion roubles ($1.7 billion) in the fourth quarter, hit by weaker oil prices.

Rosneft is the first Russian oil and gas producer to report results for 2018, the first year of annual losses for oil prices since 2015.

Rosneft said the production of liquid hydrocarbons in the fourth quarter stood at 4.79 million barrels per day, up 1.4 percent from the third quarter.

The company expects its crude oil and gas condensate to grow by 3 percent to 4.5 percent this year, depending on the implementation of a global oil output deal in the first half of the year.

Rosneft also said its fourth-quarter revenue fell 5.3 percent quarter on quarter to 2.2 trillion roubles, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 24.1 percent to 488 billion roubles, hit by increased spending by the end of the year along with higher export taxes and lower oil prices.

($1 = 65.5691 roubles)

writing by Tom Balmforth and Vladimir Soldatkin; editing by Louise Heavens and David Evans

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