Rosneft's Q2 output, refining volumes down under severe pressure: CEO

Moscow — Russian state-controlled oil producer Rosneft's output and refining volumes came under severe pressure and deteriorated in the second quarter of 2020 due to unprecedented macroeconomic conditions, CEO Igor Sechin said Aug. 14.

The decrease in operating and financial results was due to lower prices and demand caused by the coronavirus pandemic, as well as due to the company's constraints under the OPEC+ deal, Sechin said.

"Our financial metrics demonstrated a positive dynamic in the course of 2Q 2020. This provides us confidence that the company's financial results will stage a recovery in the upcoming periods," Sechin said in the company's statement.

The company's Q2 liquids production fell 13% on the year to 4.04 million b/d in compliance with its quota under the OPEC+ deal, according to financial and operating results published by Rosneft.

In the first half of 2020, Rosneft's liquids output dropped by 7.3% on the year to 4.34 million b/d.

The key tools used by Rosneft to reduce output to comply with the OPEC+ deal remove the need for well suspension and repair during prolonged down-time and subsequent start-up, the company said.

"[This] is important in terms of maintaining the potential for production recovery," Rosneft said.

Despite limitations due to the OPEC+ deal, Rosneft continues to develop its key assets and implement new digital technologies to increase field development efficiency.

Rosneft's gas production in the second quarter amounted to 15.2 Bcm, down 8.8% on the quarter and 7.1% on the year, due to lower gas demand, seasonal factor, and OPEC+ constraints.

The company's overall hydrocarbon production decreased by 12% on the quarter and 11.5% on the year to 5.05 million b/d of oil equivalent.

Overall refining volumes in the second quarter dropped by 16% on the quarter and 3.8% on the year to 24 million mt, reflecting lower demand for petroleum products due to the coronavirus pandemic.

However, in the first half of the year refining volumes increased by 1.7% on the year to 52.7 million mt.