Russian state-controlled oil producer Gazprom Neft managed to avoid a sharp drop in production last year, despite pressure from authorities in Moscow to reduce output under the country’s commitment to the Opec+ alliance aimed at balancing global supply and demand.
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According to the company’s latest financial statements, oil, condensate and gas output barely changed last year, remaining at about 710 million barrels of oil equivalent.
A less than 1% drop in oil and condensate production to 780,000 barrels per day was offset by an almost 6% rise in gas output to about 24 billion cubic metres.
Despite adverse operating conditions, Gazprom Neft said it continued efforts to build the basis for long-term output growth, acquiring exploration and development licences for 18 blocks in West Siberia's Khanty-Mansiysk and Yamal-Nenets regions.
Additionally, it signed a joint venture agreement with Anglo-Dutch supermajor Shell for the exploration of two large blocks on the Gydan Peninsula in the Yamal-Nenets region and with several Russian companies to tap into unconventional oil reserves.
The recovery in hydrocarbon output in the second half of 2020 helped Gazprom Neft to report an near tripling of net profit to 82 billion roubles ($1.1 billion) in the fourth quarter as against the third quarter of the last year.
However, for the whole year, the company recorded a 71% decline in net income to 118 billion roubles as it plunged into the red in the first half of 2020 following the sharp drop in energy prices and the curtailment of its oil output amid the Covid-19 pandemic, which hammered global demand.
Gross revenues for 2020 fell 20% to 2 trillion roubles.
Gazprom Neft said it managed to stay in the black for the year largely due to reduced purchasing, operating, administrative, transportation and other costs.
Such costs fell to just above 1 billion roubles last year from 1.2 billion roubles in 2019.
