Rosneft profits tumble by 80%

Russian oil giant Rosneft said Wednesday that low oil prices in the first quarter of the year had haemorrhaged its profits, with tumbled by 80 percent.

The company reported a first-quarter net profit of $200 million, after having recorded profits of $1 billion during the same period last year.

Rosneft's total revenue suffered a 32.6 percent drop, falling to $14.5 billion, slightly exceeding the expectations of analysts quoted by Russia's Interfax news agency.

The company said its earnings before interest, taxes, depreciation and amortisation (EBITDA), a measure of underlying profitability, also fell by 26 percent to $3.7 billion.

Oil prices hit in January a low of nearly $25, a level not seen since 2003 and sending shockwaves through the global oil industry, which has been forced into massive layoffs and numerous bankruptcies.

While prices have recovered to rise above $50 this week, they are still far below the $100-plus level of just over two years ago, when a global supply glut sent prices on a downward slide.

Rosneft head Igor Sechin said in a statement that the company was focusing on "business efficiency" by reducing extraction costs amid rampant inflation and "negative market conditions."

Sechin added that the company had nevertheless maintained a "stable level of operating cash flow" to pay for all planned investments and fulfil its financial obligations.

The Russian government is trying to reduce its stake in Rosneft, which has been targeted by Western sanctions over Moscow's role in the Ukraine crisis, in an effort to fill the state coffers.

The government has for years discussed reducing its stake in Rosneft, a sprawling energy holding in which state ownership is now 69.5 percent.

In January, Finance Minister Anton Siluanov said Russia could sell a 19.5 percent stake in Rosneft.

Officials are now increasingly raising the question of privatisation due to the economic slump, despite worries about unfavourable market conditions and the weak value of the Russian ruble.