* Rosneft CEO says company working to offset sanctions
* Rosneft expects no changes in cooperation with foreign
* Statoil says no change in business with Rosneft
* Net income rises to 172 bln roubles thanks to rouble rise
* Rosneft says BP pays $1.9 bln in prepayment for oil supply
(Updates after conference call)
By Vladimir Soldatkin
MOSCOW, July 25 Russia's biggest oil producer
Rosneft said on Friday it has been seeking ways to
cope with the negative impact of international sanctions, as it
reported higher net income Helped by a stronger rouble.
Kremlin-controlled Rosneft, which accounts for 40 percent
of Russian oil production, was hit by U.S. sanctions over
Moscow's actions in Ukraine, limiting the company's access to
Cooperation with international peers is important to
Rosneft, 19.75 percent of whose shares are owned by BP.
ExxonMobil also has a number of joint projects with
Chief Executive Officer Igor Sechin, a longstanding ally of
Russian President Vladimir Putin, said the company has been
working on a plan to offset the negative effect of the punitive
"Together with our partners - the world's leading oil
companies - we are working on a plan to minimise the
consequences of including Rosneft on the sanction lists," Sechin
said in the statement.
Svyatoslav Slavinsky, in charge of Rosneft's financials,
told a conference call that the company does not expect any
changes to its joint projects with international majors.
"Speaking about our forward plans regarding our cooperation
with our partners, there have been no changes, everything has
been done and (funding) is on track... We should not expect any
major changes," he said through an interpreter.
The head of Norway's Statoil, with which Rosneft
has plans to jointly develop Russia's Arctic offshore riches and
hard-to-recover oil, said it has been studying the sanctions
that have been implemented, but there has been no change in
However, Russian companies, including Rosneft, are facing
tougher sanctions from the European Union as the deepest
East-West spat since the end of the Cold War two decades ago
The new round of punitive measures, following the downing of
a Malaysian plane with 298 people on board over Ukraine in a
pro-Moscow rebel-held province, may include a ban on exporting
oil and gas producing equipment to Russia.
Rosneft said its net income in the second quarter - before
the sanctions were introduced - surged by almost five times
year-on-year to 172 billion roubles ($4.9 billion), beating
analyst forecasts, due to a stronger rouble.
Rosneft reports in roubles and the stronger currency has a
positive impact on its huge foreign currency-denominated debt.
Analysts, polled by Reuters, had expected April-June net
income at 161 billion roubles. Excluding the foreign exchange
effect, net income increased 88 percent year-on-year.
Rosneft's shares were down 0.7 percent in late afternoon
trade, outperforming a 1.4 percent decline of the broader Moscow
The company said its earnings before interest, taxation,
depreciation and amortisation (EBITDA) rose to 304 billion
roubles, almost in line with expectations.
Sales for the period rose to 1.44 trillion roubles, slightly
above the 1.42 trillion roubles expected by analysts. Rosneft
reported it received $1.9 billion of advanced payments from BP
in July under a five-year oil supply deal.
Free cash flow surged to 112 billion roubles while net debt
declined to 1.495 trillion roubles.
($1 = 35.0685 Russian Roubles)
(Editing by David Evans and Jason Neely)