Mixed profits for energy giants

Russian energy giant Gazprom’s net profit fell 10% in 2012 compared to the previous year due to rising costs and lower sales whilst its rival BP saw underlying profits of […]

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By Priyanka Shrestha

Russian energy giant Gazprom’s net profit fell 10% in 2012 compared to the previous year due to rising costs and lower sales whilst its rival BP saw underlying profits of $4.2 billion (£2.7bn) in the first quarter of 2013.

Gazprom’s profits last year totalled RUB1.183 trillion (£24.6bn) compared to RUB1.30 trillion (£27bn) in 2011. The company said net sales of gas also decreased by 6% to RUB2.7 million (£56,170) as sales to Europe and other foreign countries rose just 2%.

“This change was primarily due to increase in average realized prices in RUB terms (including customs duties) by 6%, which was partially compensated by decrease in volumes of gas sold by 4%, or 5.6 bcm (billion cubic metres)”, Gazprom said in a statement.

The energy firm’s net sales of electric and heat energy also fell by 0.3%, which it said was related to “decrease in sales volumes of electric and heat energy”. Gazprom’s operating expenses rose by 18% to RUB3.481 trillion (£7.2bn) while its net debt grew by 5% to RUB1.081 trillion (£22.4bn) due to the “decrease in cash and cash equivalents”.

BP, however, saw strong results in profits in the first four months of 2013 compared to $3.9 billion (£2.5bn) in the previous quarter.

The firm completed the sale of its interest in TNK-BP to Rosneft last month, for a total of $27.5 billion (£17.7bn) in cash and Rosneft shares and due to the Russia transaction, net debt at the end of the first quarter fell to $17.7 billion (£11.4bn).

Production of oil and gas excluding TNK-BP and Rosneft was 2.33 million barrels of oil equivalent a day – around 2% higher than the fourth quarter – but 5% lower than the same period in 2012. Following the Rosneft transaction, total oil and gas production for the Group is more than three million barrels of oil equivalent a day.

Bob Dudley, BP Group Chief Executive said: “These strong first quarter results demonstrate the progress BP is making in delivering the performance milestones that support our 10-point plan and underpin our commitment to material operating cash flow growth by 2014… These results represent a strong start to 2013 across all of our businesses.”