Russia’s state-owned Rosneft followed other oil and gas majors in reporting a surge in profits in the third quarter on the back of higher prices, with its CEO Igor Sechin predicting a “super cycle” in energy markets would drive prices higher as demand recovers.
Rosneft’s EBITDA came in at $8.7bn (RUB638bn) in the three-month period, up 13% quarter on quarter, while net income rose by 38.7% to $4.3bn. These results were achieved thanks to an 8.1% growth in revenues to $32.2bn, while free cash flow expanded by 15.9% to $5.1bn.
Moscow-based brokerages BCS Global Markets and Sova Capital both said the numbers were higher than expectations.
Speaking in an earnings call, Sechin warned of an incoming “super cycle” in energy markets. While producers often benefit from high prices in the short term, sustained very high prices can be detrimental in the long term, as they can trigger an economic downturn, in turn causing demand to collapse.
“Despite the uncertainty in the global economy due to the difficult epidemiological situation, we observe a rapid growth in demand for traditional energy resources," CEO Igor Sechin said. "As structural discrepancies between supply and demand on global energy markets are further revealed, we may witness a new super cycle on the oil and gas markets."
To help meet rising demand, Rosneft aims to increase investments in new projects, Sechin said. The company’s capital expenditure amounted to RUB689bn ($9.7bn) in the first nine months of this year, or a fifth higher than the same period in 2020. This was chiefly the result of ongoing work at Vostok Oil, and increased development at Rosneft’s Yuganskneftegaz unit.pipeline has instead flowed in reverse, eastbound, for a number of days in the last two weeks.
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