Rosneft posts 170 bln ruble net profit to IFRS in Q1, above consensus

Rosneft's net profit to International Financial Reporting Standards (IFRS) attributable to shareholders stood at 170 billion rubles in Q1 2025, the company said in a statement on Friday, as per Interfax.

A consensus forecast carried out by Interfax based on estimates from analysts at investment firms and banks had predicted the company's net profit at 166 billion rubles during the reporting period.

The company's profit rose 7.6% compared to data from Q4 2024. The drop in quarterly profit compared with Q1 2024 took place amid the rising key rate, the company said. Lending and borrowing rates thus rose 1.8-fold year-on-year, it said.

Rosneft's net profit stood at 399 billion rubles in Q1 2024. In Q1 2025, the company's revenue fell 8.5% quarter-on-quarter to 2.283 trillion rubles amid falling ruble prices for Urals oil, compared to a forecast was 2.25 trillion rubles. At the same time, costs and spending decreased more slowly than the trend for revenue, partly due to the indexation of the rates of natural monopolies, Rosneft said.

The company's revenue in Q1 2024 stood at 2.594 trillion rubles. EBITDA amounted to 598 billion rubles in the reporting period, down 15.5% QoQ. The forecast was 591 billion rubles. EBITDA stood at 857 billion rubles in Q1 2024.

During the reporting period, the company was operating amid a further deterioration of macroeconomic conditions, including a reduced price for Russian Urals oil, broader discounts, more sanctions and a strengthening ruble, Rosneft's chief executive Igor Sechin was quoted as saying. "The Central Bank of Russia makes its own decisions to determine the exchange rate of the national currency, primarily taking into account the real state of affairs in the financial system. The setting of the exchange rate does not take into account economic conditions in which a company is operating, creating additional costs during the calculation of the taxable base and currency conversion, and understates the price of oil in rubles, and so on," Sechin said.

Additional pressure on EBITDA in Q1 2025 was exerted by higher transportation costs amid the indexation of utility rates. Transneft's cost of oil transportation rose 9.9% from January 2025 and transportation of petroleum products and rail freight services 13.8% from the end of 2024, Sechin said.

"Rates increasing faster than inflation is seen among most natural monopolies, including even Russian Post. The price of sending a simple postcard has risen 20% since the start of 2024. Electricity rates increased 9.1% from July 2024, and their indexation by a further 11.6% is due in July 2025. In addition, according to an updated forecast for socio-economic development, in 2025 the indexation of regulated gas prices, electricity rates and network companies' rates will surpass forecasted inflation, thereby accelerating the cost-push inflation," Sechin said.

Rosneft's unit hydrocarbon production costs amounted to $3/boe in Q1 2025.

Capital expenditures totaled 382 billion rubles, down 2.1% from the previous quarter, due to the planned implementation of an investment program, mainly in exploration and production assets.

Rosneft's capital expenditures stood at 269 billion rubles in Q1 2024.

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Gazprom has boosted gas supplies to China via the Power of Siberia pipeline to 100 billion cubic meters, the Russian company said, as per Interfax.

"The first 100 billion cubic meters of Russian gas out of over one trillion envisaged under the industry's largest gas contract ever have been supplied to China via the Power of Siberia gas pipeline. This is only the beginning of a long journey. The contract is valid until mid-2049. Russian gas supplies to China will begin via the second pipeline route, the Far Eastern one, in 2027," Gazprom CEO and management board chairman Alexei Miller said.

Gazprom launched supplies via the Power of Siberia pipeline in 2019 under a long-term agreement between Gazprom and China National Petroleum Corporation (CNPC), and supplies have been exceeding annual contractual obligations every year since 2020, the company said.

Gazprom upped daily supplies via the gas pipeline to the maximum contract level on December 1, 2024, a month ahead of the original deadline, upon the request of the Chinese partners, since when three all-time daily high export records to China via Power of Siberia have already been set.

Gazprom increased pipeline supplies over 35% to cover around a quarter of China's additional demand for gas in 2024.

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Dow Inc.’s steam cracker at Tarragona, Spain came back online on May 22 following a total shutdown at the end of April, according to various market sources on May 28, as per Chemweek.

The initial shutdown was caused by a nationwide power outage in Spain on April 28, resulting in the facility halting production. The company’s press office had not responded to a request for comment as of May 28.

The outage has had a limited impact on European ethylene markets, which are currently oversupplied and facing weak demand from derivative markets.

Platts, part of S&P Global Commodity Insights, assessed ethylene CIF MED at $771 per metric ton on May 27, down 50 euro cent/metric ton from May 23.

The European propylene market has seen overall balanced demand and supply fundamentals. Activity has been limited as buyers continued to hold off purchasing volumes unless they can obtain wider discounts to the monthly industry-settled contract price.

Platts assessed propylene polymer-grade free delivered Northwest Europe at €801 per metric ton on May 27, down 50 euro cent/metric ton from May 23.

Sources in the European polyethylene market had cited volume delays expected from the site despite the unit’s resumption. One converter said their volumes have been pushed back to delivery in June but faced no trouble finding alternative supplies.

The cracker at Tarragona has an annual nameplate capacity for 675,000 metric tons of ethylene and 340,000 metric tons of propylene.

We remind, Dow has postponed its major Canadian project to produce zero-emission ethylene and polyethylene. The Path2Zero project, announced in 2021, involves building a new facility and upgrading an existing plant. The facility was expected to add 1.8 million tonnes of ethylene production capacity by 2030, with total capacity increasing to 3.2 million tonnes of polyethylene and ethylene. The project was expected to reduce CO2 emissions by 1 million tonnes.

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Alpek SAB de CV (Monterrey, Mexico) plans to shut down its Cedar Creek facility in Fayetteville, North Carolina, by the end of July, as per Chemweek.

Alpek said the move is part of a long-term strategy to optimize its global footprint, and that closure of the facility, which manufactures polyethylene terephthalate (PET), will yield about $20 million in annualized savings by 2026.

Alpek acquired the Cedar Creek facility in 2001. It has capacity to produce 170,000 metric tons per year of polyethylene terephthalate (PET) resin and about 35,000 metric tons per year of recycled PET flake.

Alpek in 2023 indefinitely idled a 170,000 metric tons per year PET plant at its Cooper River facility in Charleston, South Carolina.

Following the closure of Cedar Creek, Alpek’s global PET resin capacity will total 3.09 million metric tons per year. The company has 725,000 metric tons per year of PET resin capacity in Columbia, South Carolina, and 430,000 metric tons per year of PET resin capacity in Bay St. Louis, Mississippi. The balance of the company’s PET capacity is at facilities in Canada, Mexico, Brazil, Argentina, the UK and Oman.

We remind, the Canadian International Trade Tribunal has found that there is reasonable cause to believe that the alleged dumping and subsidization of polyethylene terephthalate (PET) from China and Pakistan has adversely affected domestic producers, Chemanalyst reports. The trade investigation was initiated by Compagnie Alpek Polyester Canada (Alpek), which filed a complaint with the Canada Border Services Agency.

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The State Oil Fund of the Azerbaijani Republic (SOFAZ) has invested $50 million in ADNOC Gas Pipeline Assets LLC (AGPA, a subsidiary of Abu Dhabi National Oil Company, ADNOC), which operates the UAE's gas pipeline network, as per Interfax.

The investment aligns with the fund's strategy to diversify its portfolio through investment in sustainable and profitable infrastructure assets, while also expanding economic ties with the Gulf Cooperation Council (GCC) region, SOFAZ's press service said.

AGPA's 982 km network comprises 38 pipelines, including 12 for commercial gas transportation, 15 for gas injection and 11 for liquefied gas transportation.

ADNOC Gas Pipeline Assets is one of the UAE's most critical energy infrastructure facilities, playing a key role in the country's sustainable energy ecosystem, the press service said. A long-term operating agreement between AGPA and ADNOC ensures stable, predictable revenue based on established gas transportation volumes, it said.

"Even during periods of volatility in global energy markets, AGPA has maintained strong financial and operational performance," it said.

SOFAZ made the investment in AGPA through a specialized infrastructure fund managed by Lunate Capital, an Abu Dhabi-based alternative investment manager.

"AGPA represents a high-quality, strategically important infrastructure asset with strong long-term return potential. We are pleased to partner with Lunate and welcome this investment opportunity that expands our presence in the Gulf region," Farhad Zeynalov, the head of SOFAZ's Investment Department, was quoted as saying.

The State Oil Fund of the Azerbaijani Republic accumulates the state's revenues from oil contracts, particularly from the sale of profitable oil and gas, from tariffs on oil and gas transportation across the country, and from state property rentals.

As of Q1 2025, SOFAZ's assets totaled $62.740 billion, up 4.5% from the start of the year. Its investment portfolio is valued at $62.45 billion. The Gulf Cooperation Council, established in May 1981, includes Bahrain, Qatar, Kuwait, the UAE, Oman and Saudi Arabia. Its primary goal is coordinating economic, financial, social, legislative and administrative integration among member states.

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