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Gazprom Neft records net profit of RUB 22 billion in 2Q 2020 (IFRS) and RUB 8 billion net profit for H1 2020

Gazprom Neft records net profit of RUB 22 billion in 2Q 2020 (IFRS) and RUB 8 billion net profit for H1 2020

St.Petersburg, August 20 - Neftegaz.RU. Gazprom Neft today announces its consolidated IFRS financial results for the first six months (H1) and second quarter (Q2) of 2020.

Lower prices for oil and oil products on the international and domestic markets during the period, together with the drop in demand for energy resources resulting from the COVID-19 pandemic, significantly impacted the company’s performance in H1 2020.

Revenues amounted to RUB 913 billion in the first 6 months of 2020, and adjusted EBITDA1 (earnings before interest, taxes, depreciation and amortization) was RUB 182 billion. Net profit attributable to Gazprom Neft shareholders for the first half-year stood at RUB 8 billion. In particular, a net profit of RUB 22 billion was generated in Q2 2020.

Hydrocarbon production (incl. Gazprom Neft’s share in joint ventures) reached 48.6 million tonnes of oil equivalent (mtoe) in H1 2020, a 2.4% increase year-on-year, resulting from higher production at Arcticgas fields and oil-rim development projects, the commissioning of gas treatment and utilisation facilities at Gazpromneft-Vostok and Gazpromneft-Orenburg fields, and the optimisation of compressor equipment at the Novoportovskoye field.

The company acquired subsoil usage rights to 3 new license blocks during the reporting period and expanded the boundaries of a further 9 license blocks in the Yamalo-Nenets and Khanty-Mansi Autonomous Okrugs. A joint venture was established between Gazprom Neft, LUKOIL and Tatneft to develop technologies for developing hard-to-recover hydrocarbon reserves in the Orenburg Oblast.

“As a result of the hard work and initiatives undertaken by our employees, combined with the stabilisation of global oil prices following the conclusion of the new OPEC+ deal, we have been able to present a net profit both for 2Q 2020, and for H1 2020 overall. In spite of the challenging market environment presented by COVID-19, Gazprom Neft continues to implement major production and refining projects, in addition to forming new partnerships with Russian and international companies, including Shell, LUKOIL, Tatneft and Zarubezhneft", Alexander Dyukov, CEO of Gazprom Neft said.

A major milestone was the commissioning of the Moscow Refinery’s unique EURO+ refining complex in July 2020 - the 1st facility in Russia to cover the entire production cycle, from primary refining of crude oil to output of oil products. Following the launch of this facility, 80% of the Moscow Refinery has now been modernised and upgraded, with refining depth (conversion rate) increasing to 85%.



As a result of the cutting-edge solutions integral to the EURO+ complex, the Moscow Refinery has significantly reduced its environmental impact, as well as progressing to a new level in its use of digital technologies.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets in H1 2020 reached 19.5 million tonnes - refining volumes having been impacted by lower demand for oil products in response to the COVID-19 epidemic, as well as unfavourable pricing environments on domestic and international markets.

The company sold 10.9 million tonnes of oil products through premium sales channels in H1 2020. Bitumen sales increased 20% year-on-year, driven by the development of new export shipment routes.

Sales of aviation fuel, marine fuels and lubricants were significantly affected by various limitations as well as decreasing demand in Russia and worldwide under the COVID-19 epidemic: even under these unprecedented conditions, however, the company continued to successfully increase its market share in various specialized market sectors.

In July 2020, Gazprom Neft-Rosneft joint venture Messoyakhaneftegaz (operated by Gazprom Neft) successfully implemented a unique APG (associated petroleum gas) utilisation scheme, taking APG utilisation levels to 95% - clearly demonstrating the company’s commitment to the rational usage of natural resources in the Arctic region.

“We have demonstrated the effectiveness of our ‘Antivirus’ programme, designed to protect our employees and clients from the spread of COVID-19, maintain the continuity of our operational and production processes, ensure the company’s financial sustainability, and support the regions in which we operate. Gazprom Neft’s skills and expertise in oil-spill response proved key in helping to mitigate the consequences of the emergency in Norilsk, where our own emergency-response team played an active role in removing oil-contaminated fluid from the Amburnaya riverbed. The principles of sustainable development, including respecting the environment and the safety and wellbeing of our employees, remain the key focus for Gazprom Neft”, Dyukov noted.

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