Connect to share and comment
Russia's state oil giant Rosneft on Friday posted a record profit of $11.4 billion (8.4 bn euros) in 2012 thanks to rising crude production and a sharp year-on-year jump in its output of natural gas.
The stellar results for Russia's largest oil company capped a year in which it agreed to take control of the country's number four producer TNK-BP and established a lucrative joint venture with the gas exploration firm Itera.
Chief executive Igor Sechin -- a close ally of President Vladimir Putin who structured the TNK-BP deal -- said Rosneft was fast becoming the world's largest energy firm.
He particularly pointed to the inroads Rosneft has made in exploiting the untapped energy reserves of the Arctic with companies such as US super-giant ExxonMobil and Norway's Statoil.
"Our efforts have made projects offshore on the Russian shelf a reality underpinned by investments by Rosneft and its strategic partners," Sechin said in a statement.
"We plan to maintain this pace moving forward with our strategy to further grow shareholder value reflecting the company’s true potential."
The government had earlier on awarded Rosneft the right to explore 12 new fields in the Arctic that had been previously eyed by private players such as Lukoil.
Sechin said on Thursday that Rosneft's planned acquisition of the Anglo-Russian TNK-BP venture would see the company's oil production nearly double to 1.58 billion barrels from 894 million barrels in 2012.
Rosneft's 7.2 percent rise in profit came in a year in which Russia recorded a post-Soviet oil production record and outpaced previous leader Saudi Arabia.
Putin's energy strategy has focused on consolidating Russian growth around two dominant champions: Rosneft and its state-held natural gas counterpart Gazprom.
Rosneft in particular has enjoy a decade of rapid growth that in 2012 saw it secure deals that will see it control about 40 percent of the country's total production market.
Sechin has also previously voiced plans to join Rosneft and Gazprom into a single behemoth reminiscent of the Soviet energy ministry.
Sechin told Putin in a meeting this week that his company's market capitalisation had risen to $92 billion -- within sight of the magic $100 billion target previously set by the company.
But Putin said he expected more from Rosneft and soon prompted Sechin to promise to soon lift the company's market value to $120 billion.
Yet analysts worry less about the market capitalisation of Rosneft -- the majority of its shares still held by the government -- than they do about its strategy after the acquisition of TNK-BP.
Gazprom for one has been discounted by investors for its decision to spend billions on politically sensitive projects ranging from support for the 2014 Winter Olympic Games in Sochi to the sponsorship of a football team in Putin's native Saint Petersburg.
Rosneft has been criticised for blocking competition to the detriment of the federal budget by winning control of fields and then sitting on them just so that they will not fall into competitors' hands.
Analysts believe that Rosneft will soon be forced to make a move on those sites -- many of them far from the firm's traditional European market -- because its old field production is gradually fading while its Asian client base is undergoing a boom.