Russia's Gazprom Neft posted a steep rise in revenue in the first quarter while profit also climbed on the fourth quarter of 2020, although production remained relatively flat.

Revenues jumped by over 11% to 611 billion roubles ($8.1 billion) in the first quarter as against last year's final period, while net income was up over 3% to 84.2 billion roubles.

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The state-controlled gas player produced 178 million barrels of oil equivalent between January and March, which is a half a percentage point higher than between October and December last year.

Output was, however, down 3% from the first quarter of 2020 due to curtailments imposed by Opec+.

Opec+ is a grouping of Opec and key producers, led by Russia, that have curtailed output in an effort to rebalance oil markets amid the demand destruction caused by the coronavirus pandemic.

However, the curbs have not affected Gazprom Neft’s greenfields, which had higher profit per barrel due to tax concessions.

Production at such greenfields rose by 41% to 30.4 million boe in the first quarter as against the same period of 2020.

Chayanda contribution

Gazprom Neft expects output at greenfields to rise further later this year following start-up of oil production at the Chayanda field in East Siberia.

This asset is expected to provide about 6.8 million boe of incremental production in 2021, company executives said during a conference call on Tuesday.

Improvements in company’s performance in the first quarter stem from the sound management of the legacy well stock during the higher restrictions on production last year, which authorities partially eased earlier this year.

An additional positive factor was the company’s quick decision to adopt comprehensive measures to prevent the Covid-19 spread among its personnel last year, paving the way for faster recovery, according to industry analysts in Moscow.

Company executives said that, while Covid-19 preventive measures came at a cost, Gazprom Neft was still able to reduce operating costs by 3% to 232 roubles per boe in the first quarter as against the same period of 2020.

However, Gazprom Neft still had to invest higher amounts into restoring production capacity during the reporting quarter, with its cash and cash equivalents declining by 10% to 213 billion roubles.

Meanwhile, gross debt rose by less than 1% to 743 billion roubles during the first quarter of this year.