Gazprom Neft Reports 12.5% Income Increase in First Quarter

Gazprom Neft, the oil arm of Russia’s gas giant Gazprom, reported a rise by 12.5% in first-quarter net income year-on-year to 69.7 billion roubles ($1.1 billion), Reuters reported. The company attributed the rise to stronger oil prices, production and sales.

January – March sales grew by 14.5 percent from the same period a year before to 520.6 billion roubles, while it generated a free cash flow of 11.685 billion roubles compared to a negative figure of 510 million roubles in the first quarter 2017.

Earlier this month, the company said it may push back its output goal of 100 million tonnes of oil equivalent by one or two years due to the deal by OPEC and other oil exporters to curb production.

The company said it had previously expected to reach this target by 2020, while now the estimate has moved to 2021 or 2022, keeping output at this level or above until 2025.

Despite the threat of U.S. sanctions against countries and companies doing business with Russian state-owned companies, Gazprom Neft has recently announced a new investment programme. Last week, the company expressed interest in the acquisition of Serbia’s state-run petrochemicals producer HIP Petrohemija. According to Serbia’s energy minister Aleksandar Antic, who revealed the news in a video posted on the website of news agency Tanjug, the Serbian government plans to accelerate talks with Gazprom Neft on the sale of the troubled company as it needs a strategic investor.

Gazprom Neft’s parent company, Gazprom, said on Tuesday that financial markets continue to be volatile, which had a significant impact on the group’s operations and financial position. As a result, the company is taking measures to ensure its operations are sustainable.

The company said the recent new U.S. sanctions against Russia do not have a significant impact on its activity.