Rosneft inked an agreement with Singapore’s Keppel Offshore & Marine and Norwegian drilling equipment firm MHWirth, to set up a Singapore incorporated joint venture company.
Russian oil major Rosneft’s revenue amounted to US$14.5 billion for the first three months, a 12.4% decline compared to the last quarter of 2015.
This firm said it used high margin trading channels for crude oil, which managed to compensate negative effect from the low oil price decline. During the quarter, gas sales increased by 13% compared to Q4 2015.
Rosneft chairman Igor Sechin said with remaining inflation process in the economy and negative market conditions, the company improved the implementation of strategic initiatives with the focus on business efficiency.
He said lifting costs were down in Q1 2016 compared to Q4 2015 and Q1 2015, which contributed to improvement in the income before interests, income tax and depreciation margin.
“The company keeps generating positive free cash flow despite capex went up by 20% driven by intensive development of new projects in upstream,” Sechin said.
“In conditions of negative macroeconomic environment the company sustains stable level of operating cash flow which supports financing of planned capital investments and timely meeting of all liabilities.”
This year Rosneft has signed several agreements to boost its footing both in Russia and internationally.
In the latest, the firm inked an agreement with Singapore’s Keppel Offshore & Marine and Norwegian drilling equipment firm MHWirth, to set up a Singapore incorporated joint venture company (JVCO).
The JVCO will establish a wholly-owned design and engineering centre (DEC) in the Russian Federation, and its principal business activities will be in relation to the design and engineering of mobile offshore drilling units for shallow waters to cater to the region.
This is just days after Rosneft clinched a deal with PetroVietnam to collaborate on offshore oil and gas exploration activities in Russia, Vietnam and elsewhere. Currently, Rosneft and PetroVietnam are already partners in the offshore Block 06.1 where Rosneft is the operator. The project comprising two gas condensate fields – Lan Tay and Lan Do – are 370km off the coast in the Nam Con Son basin.
In April, Sechin met Indonesian government officials to discuss the potential of Rosneft participating in oil refining projects in Indonesia, while Pertamina becomes a shareholder in Rosneft’s upstream projects in Russia.
This was after the firm sold stakes in its Siberian oilfields to three Indian energy companies. This agreement will see Oil India, Indian Oil and Bharat Petroresources have a combined 29.9% interest in Taas-Yuryakh Neftegasodobycha, as well as acquire 23.9% stake in Vankroneft.