Rosneft Oil Company Says 2005 Profit Up

MOSCOW – Russian state-owned oil group OAO Rosneft reported a nearly fivefold increase in net profit in 2005 thanks to high world oil prices and its acquisition of the biggest production unit of the embattled Yukos oil company.

Rosneft reported net profit of $4.16 billion, compared with $837 million in 2004. Revenue rose to $23.95 billion from $5.28 billion a year earlier.

The company did not break out quarterly results.

The disputed December 2004 auction of Yukos’ 1 million barrel-per-day Yuganskneftegaz unit against its parent company’s massive back tax bill propelled Rosneft into the No. 3 spot among Russian oil companies after it bought the mysterious shell company that won the bidding.

“The company’s strong financial performance was underpinned by its stabilization of Yuganskneftegaz operations in the first half of the year, a favorable price environment for oil and related products, significant organic growth in production, logistics optimization and continued focus on efficiency,” the company said in its statement.

After the acquisition of Yuganskneftegaz, oil output rose over the year by 10 percent from 1.45 million barrels per day to 1.59 million, the statement said, while the hefty debt incurred when buying Yuganskneftegaz had been reduced by 13 percent to $11 billion from $12.7 billion at the end of 2004.

Rosneft is preparing for a foreign listing this summer.